Drexel Hamilton analyst Brian White is out once more singing the praises of Apple Inc. (NASDAQ:AAPL) after two of the tech titan’s biggest manufacturing partners posted October sales that beat out the monthly gains seen in White’s Apple Monitor index, which tracks sales of nine ‘important’ publicly-traded Apple suppliers based in Taiwan.
Meanwhile, with a killer iPhone X beginning, standout fourth fiscal quarter results for the year posted last week, and “attractive upside over the next 12 months,” the analyst maintains a Buy rating on AAPL stock with a price target of $235, which represents a 36% increase from current levels. (To watch White’s track record, click here)
Hon Hai Precision, Apple’s leading supplier in the globe unveiled October sales last week that aw an 8% month-over-month surge. Even though these gains fall under the average boost of 11% when glancing at the last 12 years, the analyst notes that this October indicated more robust growth compared to the mere 1% month-over-month jump seen this time last year.
White explains that this bodes well for Apple and its iPhone X supercycle: “We believe Hon Hai is involved in the both the iPhone X and iPhone 8 families (with a focus on iPhone 8 Plus in the iPhone 8 family). Given the initial constraints around the iPhone X (and a later launch date than the iPhone 8/8 Plus) and the fact that Hon Hai is involved in the final assembly, we would expect the company to experience the benefit of this pull through in November and December.”
Additionally, Pegatron demonstrated an 8% month-over-month sales lift in the month of October, which outperforms the average performance of the last five years that just fell flat. White adds, “We believe Pegatron is more exposed to the final assembly of the iPhone 8 family with a focus on the iPhone 8.”
For context, both of Apple’s biggest suppliers beat out White’s Apple Monitor in October, with sales for the month in White’s Apple Monitor rising by 1% month-over-month, a far cry from the average rise of 7% throughout the past 12 years. Yet, the analyst wants to note his Apple Monitor’s September quarter showcase proved to be the best “on record with five consecutive months of better than average seasonality.”
Looking ahead, the future looks quite bright for the tech leader, with White concluding: “With a market cap of over $900 billion, we believe Apple is on its way to becoming a ‘trillion dollar baby’ as reflected in our price target. We were the first on Wall Street to project that Apple would reach a $1 trillion market cap as reflected by a price target; our current price target of $235.00 equates to approximately a $1.2 trillion market cap.”
Wall Street is throwing a bullish party when it comes to the tech titan, considering TipRanks analytics exhibit AAPL as a Strong Buy. Based on 30 analysts polled by TipRanks in the last 3 months, 25 rate a Buy on Apple stock while 5 maintain a Hold. The 12-month average price target stands at $187.03, marking an 8% upside from where the stock is currently trading.