Stellar Apple Inc. (AAPL) iPhone X Weekend Debut Leaves GBH Insights Confident That Rising ASPs Will Drive Major Growth for FY18

Daniel Ives: Worldwide AAPL iPhone X demand continues to transcend supply by a two-to-one ratio.


Apple Inc. (NASDAQ:AAPL) shares were rising almost 3% on Friday after the sleek and massively anticipated iPhone X made its dynamite official debut. Captivating the attention of many bulls, just how enticing do customer buzz and demand trends alike look for the tech titan?

GBH Insights analyst Daniel Ives notes that based on his store checks, the iPhone X is already selling out in most stores through big cities throughout the U.S., where if any supply was remaining by yesterday afternoon, it was “limited” at best. These store checks span the likes of New York, Boston, Los Angeles, Philadelphia, San Fransisco, Dallas, and Washington D.C., showing one thing for certain: the “higher end iPhone X [shines] front and center.”

From the analyst’s customer checks and survey research, it appears 78% of Apple’s enthusiastic consumer base is willing to buy the $1,149 higher end version over the $999 version with less gigabytes, which further bolsters Ives’ bullish case on surging averaging selling prices driving meaningful growth for the AAPL machine come fiscal 2018. In fact, the analyst’s ASP estimate looking for $746, already more bullish than the Street, might “still prove to be conservative if this trend continues,” landing potential “upside surprise” in the next two quarters for the tech titan.

Ultimately, “While lines were stronger than we have seen in years across Apple stores and rivaled iPhone 6 first day build up, overall lead times have now shorted to 3-4 weeks from 5-6 weeks seen a few days ago, indicating that the supply chain has started to accelerate out of Asia and should now be able to find a balance of supply/demand hopefully by January/February 2018 if this trend continues. We continue to believe global demand for iPhone X is outstripping supply by a 2:1 margin and now the biggest challenge for Cook and Apple will be to alleviate the supply chain in the near-term to help fulfill demand for holiday season. Based on our initial analysis and pre-order demand trajectory, we believe the current iPhone X cycle is tracking between 10%-15% ahead of the iPhone 6/6+, which has been Apple’s most successful product launch to date and is a positive data point for FY18 growth,” Ives contends, singing the titan’s praises for better than even anticipated iPhone X demand in a weekend launch that has taken the public by selling storm.

As such, the analyst reiterates a Highly Attractive rating on AAPL stock with a price target of $205, which represents a close to 19% increase from where the shares last closed. (To watch Ives’ track record, click here)

Wall Street likewise deems the big Apple machine a tech darling, earning one of the most enthusiast analyst consensus ratings on the market. TipRanks analytics indicate AAPL as a Strong Buy. Out of 29 analysts polled by TipRanks in the last 3 months, 24 are bullish on Apple stock while 5 remain sidelined. With a return potential of 8%, the stock’s consensus target price stands at $187.11.