How Apple Inc. (AAPL) Fingerprint Sensor Removal Would Impact iPhone 8, Micron Technology, Inc. (MU) Insider Trading Is Not Material to Share Price

Tuesday's Analysts Roundtable - The Latest Insights for Apple and Micron


Apple “De-Emphasizes” Fingerprint Sensor

As Apple Inc. (NASDAQ:AAPL) readies to release the iPhone 8 in a month’s time, analyst Jun Zhang of Rosenblatt shares his analysis on the tech giant in a neutral report. From the analyst’s industry probing, it has become likely that the fingerprint sensor Apple users have come to use each day will not be in the next model, with a low yield rate as the culprit.

Subsequently, Zhang predicts OLED mass production could very well hit one week before what the buzzing public has anticipated: by the third week of September. However, the analyst notes, “On the other hand, we do not believe Apple has changed its 2H production forecast at this time due to the potential slower ramp of iPhone 8 OLED production, allowing some time for a yield rate improvement.”

Exploring what potential effect Apple’s removal of the fingerprint sensor from its forthcoming 10th anniversary iPhone edition might have on the wider market, Zhang opines, “With Apple de-emphasizing the fingerprint sensor and emphasizing 3D sensing/ facial recognition, it might influence other OEMs, such as Samsung (005930-KR:NR) to follow the trend until under screen fingerprint sensor technology has matured enough to adopt.” In the meantime, “3D sensing and an OLED panel (full screen) are the major upgrades in the iPhone 8. Wireless charging, fast charging, and a glass back cover are several upgrades for all three new models,” says the analyst.

Expecting production of the iPhone 8 to reach between 35-40 million by the end of 2017, the analyst sees a sluggish ramp starting with 5 million in the third quarter and accelerating to between 30-35 million in the fourth quarter. For the back half of the year, the analyst forecasts iPhone 8 production to circle 35-40 million units, with a 5 million unit estimate in the third quarter and 30-35 million in the fourth quarter.

Yet, while Zhang believes iPhone 8 OLED production has juice for a bolstered ramp through the second fiscal quarter, with chances to bring in 40 million units for the giant, the analyst also sees a potential for overall iPhone production to drop. Zhang looks ahead and envisions that 7S/7S Plus production could potentially slow to 25-28 million units in the second fiscal quarter of 2018. Notably, second fiscal quarter total iPhone production will be contingent upon how sales perform in the beginning of the launch, surmises the analyst.

Zhang reiterates a Neutral rating on AAPL stock with a $150 price target representing a decrease of nearly 5% from current trading levels. (To watch Zhang’s track record, click here)

TipRanks analytics views Apple as a Strong Buy. Out of 34 analysts polled by TipRanks, 26 are bullish, while 8 are sidelined on Apple stock. The 12-month average price target stands at $170.58 representing a potential upside of near 7%.

Micron Insider Buying/Selling Talk “Lost in Translation”

Is the rumor mill making much ado about nothing when it comes to Micron Technology, Inc. (NASDAQ:MU) and recent insider buying and selling trends throughout the past six months?

Top analyst Vijay Rakesh at Mizuho believes that with memory pricing staying the robust course, insider/buying selling movements have been “lost in translation,” finding that when assessing the past five years, not too many parallels can be drawn between the two.

As such, the analyst reiterates a Buy rating on MU with a price target of $38, which implies a close to 29% increase from where the shares last closed.

Rakesh highlights, “A look at the last 6-months insider selling in Micron and historical 5-year insider buying/selling shows few trends with recent insider selling or buying not material. If anything, the last 5-years shows that MU insiders sold at the bottom while selling abated at the tops. As we show, insider buying/selling is much less of a forward indicator compared to the last 5-year memory pricing trends which track MU stock price (obvious). And if that is any indicator, memory pricing remains strong into 2H17 and should be a positive.”

“Maybe (and obviously) memory pricing is a better indicator of stock price – a look at last 5-years of data. […] MU’s stock price moves lock step with DRAM pricing,” contends the analyst. Likewise, Rakesh is positive the chip giant will continue to benefit from strength in DRAM and NAND pricing through the back half of the year. A one-two punch of limited supply meets stellar demand circling iPhone, PC, server, as well as deep learning trends will have this giant scoring upside in the back half of the year, predicts Rakesh.

Vijay Rakesh has a very good TipRanks score with a 68% success rate and a high ranking of #39 out of 4,608 analysts. Rakesh yields 25.9% in his yearly returns. When recommending MU, Rakesh realizes 44.8% in average profits on the stock.

TipRanks analytics demonstrate MU as a Strong Buy. Based on 20 analysts polled by TipRanks in the last 3 months, 17 rate a Buy on Micron stock, 2 maintain a Hold, while 1 issues a Sell on the stock. The 12-month average price target stands at $41.47, marking a 40% upside from where the stock is currently trading.

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