Apple Inc. (AAPL): Any More Component Order Cuts Coming in FQ2? This Bull Doesn’t Think So and Bets on iPhone X Sales Momentum in China’s Market

Rosenblatt's Jun Zhang also highlights that iPhone X sales looked solid in the North American market during the course of the holiday season.

Apple Inc. (NASDAQ:AAPL) should have no more iPhone production cuts coming on the heels of he holiday season, as far as Rosenblatt analyst Jun Zhang‘s research reveals, with the analyst likewise looking for iPhone X sales to fire up in China.

As such, the analyst reiterates a Buy rating on AAPL stock with a price target of $180, which implies a nearly 5% upside from current levels. (To watch Zhang’s track record, click here)

“Taiwanese media reports and estimate cuts could be confusing the market as we believe they are referring to previously mentioned iPhone 8/8 Plus production cuts with an iPhone X production ramp in December,” explains Zhang.

Because the analyst does not anticipate iPhone X component order cuts coming in the second fiscal quarter of 2018, Zhang stands by the iPhone X production forecast of 35 plus million units.

“We previously wrote about iPhone 8/8 Plus production/ component order cuts and we have not seen another round, but we were initially very cautious about 8/8 Plus sales so we are not surprised by the 4-5 million production cut in the March quarter. Although some media reports are likely highlighting cuts at specific iPhone 8 component suppliers and Android orders, we highlight that we do not see 3D sensing or OLED panel order cuts, which are specific components for the iPhone X. Overall, iPhone component suppliers could see a 25% decline QoQ in the March quarter, however iPhone X component suppliers would still see a flat sequential March quarter,” adds the analyst.

Zhang likewise comments on stability seen in iPhone X sales during the course of the holiday season on the domestic market front, and bets on a sales lift in China’s market throughout the last past weeks. Industry analysis conducted with Chinese operators points to iPhone X sales that have a strong chance of having topped iPhone 8/8 Plus sales “combined” to date. “We also note that recent estimate adjustments could be attributed to previously very bullish views on the iPhone X cycle,” contends the Rosenblatt bull, who stays strong in the tech titan’s corner.

TipRanks shows a strong bullish analyst consensus for this tech darling, with 21 out of 28 analysts polled in the last 3 months rating a Buy on AAPL stock and 7 maintaining a Hold. The 12-month average price target of $191.00 boasts potential upside of 11% from where the stock is currently trading.

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