Top Analyst Gets More Confident on Apple Inc. (AAPL) for Strong iPhone X Mix in Fiscal 2018

Piper Jaffray's Michael Olson notes that following an encouraging iPhone buyer survey, it is achievable for Apple to hit $720 in iPhone ASP; as such, shares have the potential to soar.


Top analyst Michael Olson at Piper Jaffray is out with his first bullish note on Apple Inc. (NASDAQ:AAPL) of the new year, finding himself all the more confident on the tech machine following survey results of 400 iPhone buyers. The verdict? Olson wagers that the mix of iPhone sold in fiscal 2018 should align with his expectations, leaving the analyst angling for a “strong iPhone X mix.”

In reaction, the analyst reiterates an Overweight rating on AAPL stock with a $200 price target, which implies an 18% upside from current levels.

Whereas Olson projects the iPhone X to comprise of 38% of Apple’s iPhone sales sold this year, the survey points to 35% of buyers looking to purchase the shiny new iPhone X.

“Our estimated mix of iPhone 8 in FY18 is 40% and our survey was exactly in-line at 40%. Given the data points in our iPhone mix survey, we’re increasingly confident in our ASP assumptions and overall revenue & EPS estimates for the fiscal year (’18). A strong near-term iPhone X mix and potential for expanding array of next gen form factor devices to hit in Sep-18 leaves us optimistic that AAPL shares can continue to work higher in what we now believe is a ‘super-long cycle’ vs. a ‘super cycle,'” highlights the analyst, who explains: “Our iPhone ASP assumption of $720 […] therefore, appears achievable, increasing our confidence in revenue and EPS estimates.”

On back of predictions for a “super long cycle,” Olson bets that an “expanded array of next gen iPhones should drive strong ongoing upgrade intentions well into FY19,” adding: “Beyond the March & June quarters, we anticipate a wider array of X-generation devices similar to iPhone X will launch in Fall-18.”

Michael Olson has a very good TipRanks score with a 64% success rat5e and a high ranking of #85 out of 4,727 analysts. Olson garners 18.0% in his yearly returns. When recommending AAPL, Olson realizes 19.1% in average profits on the stock.

TipRanks shows a pool of analyst data from across the Street that backs Olson’s bullish praise on Apple’s market opportunity. Based on 28 analysts polled by TipRanks in the last 3 months, 21 are bullish on Apple stock while 7 remain sidelined. With a return potential of nearly 13%, the stock’s consensus target price stands at $191.00.