The iPhone 12 and iPhone 12 Pro began selling on Oct. 20. The iPhone 12 Mini and iPhone 12 Pro Max came to market on Nov. 13.
Courtesy AppleA month after Apple introduced the first two models of its iPhone 12, two analysts are staying on the sidelines.
UBS analyst David Vogt maintained a Neutral rating on Apple stock (ticker: AAPL), with a $115 price target. In a note on Monday, he said a UBS Evidence Lab survey of 7,000 smartphone users in the U.S., U.K., China, Germany, and Japan showed that intent to purchase an iPhone in the next 12 months ticked higher. He estimates fiscal 2021 iPhone sales of 210 million units, but thinks about 230 million units are priced in to the stock.
“Purchase intent is similar to the launch of the iPhone X in 2017, the most recent comparable launch of a ‘supercycle’ iPhone,” he wrote. “While the survey data is directionally positive for demand, we believe the positive inflection is already captured in investor sentiment and buy-side expectations.”
Credit Suisse analyst Matthew Cabral maintained a Neutral rating with a $106 price target on Friday. He noted that wait times to purchase an iPhone from Apple online—which he views as a proxy for initial demand—shows wait times for iPhone 12 Pro and Pro Max extending, while iPhone 12 Mini wait times are largely less than a week. The iPhone 12 and iPhone 12 Pro began selling on Oct. 20. The iPhone 12 Mini and iPhone 12 Pro Max came to market on Nov. 13.
Cabral said such trends support his view that this generation will have a stronger high-end mix, which will push the average selling price higher. But that contrasts with potentially softer sales on the lower-end iPhone 12 and iPhone 12 Mini. He said a factor to monitor is potential supply constraints.
Aside from the iPhones, Vogt notes that investors will be focusing on services growth in fiscal 2021. Last week, Apple announced an App Store program to slash its commission in half for businesses that make $1 million or less in sales on the platform.
“Although Apple recently announced a token commission reduction in our view for small businesses, investors should be hyper-focused on the European Commission investigation into Apple’s business practices and in-app purchase system,” he wrote. “Although purchase intent for iPhones ticked modestly higher in the recent survey data, any further incremental changes to the App Store commission structure could partially offset iPhone upside while negatively impacting sentiment.”
Apple stock was down 2.5% to $114.46 near midday Monday, while the broader S&P 500 index was up less than 0.1%.
Write to Connor Smith at connor.smith@barrons.com
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November 24, 2020 at 12:14AM
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Apple Stock Is Falling Because the Price Already Reflects iPhone 12 Demand - Barron's
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