Exuberance over iPhone 7 propels Apple shares to 2016 high

Shares of Apple on Thursday soared to their highest level in 2016 after reports of strong early sales for the iPhone 7, and analysts quickly raised estimates for the tech giant.

Cupertino-based Apple jumped more than 3 percent and was well ahead of the previous high for the year, reached in April.

“Apple is doing very well,” said Michael Tchong, founder of Las Vegas-based Ubercool Innovation, which tracks tech trends. “It does look like the iPhone 7 is selling better than expected.”

Analysts with investment firm Credit Suisse on Tuesday reported that some wireless phone carriers are busy taking orders for the new iPhone.

“Both T-Mobile and Sprint have announced today that they are seeing a record number of preorders for Apple’s iPhone 7 and 7 Plus, shattering previous records,” Credit Suisse analyst Kulbinder Garcha stated in a note on Tuesday.

Additional indications of brisk sales prompted Credit Suisse to raise its estimates for the tech giant.

“We believe a number of recent data points suggest a better-than-expected iPhone 7 cycle, in both volume and mix,” Garcha wrote in a subsequent note on Thursday.

Apple, which began taking preorders last week, said Wednesday it is already sold out of the iPhone 7 Plus and the jet black iPhone 7. On Thursday, the company told several media outlets that would-be buyers who show up at Apple Stores on Friday — when the iPhones are scheduled to go on sale — won’t be able to get their hands on the sold-out models.

.

[graphiq id=”1I95KWBBbxj” title=”Apple Inc. (AAPL) Stock Price” width=”600″ height=”617″ url=”https://w.graphiq.com/w/1I95KWBBbxj” link=”http://listings.findthecompany.com/l/8500602/Apple-Inc-in-Cupertino-CA” link_text=”Apple Inc. (AAPL) Stock Price | FindTheCompany” ]

 

Apple rose 3.4 percent and closed at $115.56. That compared with the prior high for 2016 of $112.10 on April 14.

For the 2017 fiscal year that will end in September 2017, Apple is expected to earn $9.74 a share, according to Credit Suisse. That’s well above the investment firm’s prior estimate of $9.30 a share, Garcha said.

In a survey of iPhone users, Credit Suisse discovered that an estimated 60 percent of iPhone users intend to replace their devices within one year.

That suggests users will replace their iPhone every 29 months, which is faster than Credit Suisse’s previous replacement-rate estimate of every 32 months, based on earlier research.

Apple also could benefit from good timing, possibly capitalizing on the woes afflicting new smartphones offered by one of its principal rivals, Samsung.

“Samsung has had to halt sales and recall its recent flagship phone, the Galaxy Note 7,” Credit Suisse said in the note to its clients.

Other investment firms, including Morgan Stanley and RBC, also issued positive comments about the new iPhone 7.

“There will be a lot of pent-up demand for the iPhone 7,” Tchong said. “They have already sold 1 billion iPhones, so that’s a huge base to draw from.”

 

Photo: Apple CEO Tim Cook introduces the iPhone 7 at the Bill Graham Civic Auditorium in San Francisco, Calif., on Wednesday, Sept. 7, 2016. (Gary Reyes/Bay Area News Group)

 

Tags: , , , , , , , ,

 

Share this Post



 
 
 
 
 
css.php