RBC Capital has a positive stance on Apple’s stock as the manufacturing orders for iPhone7 increased to nearly 80 million
Amit Daryanani, RBC Capital analyst has a positive outlook on Apple Inc. (NASDAQ:AAPL) stock subsequent to a report, which revealed the company’s plan to produce higher-than-expected iPhones this year. The firm maintains a price target of $120 on Apple stock, suggesting a 24.44% upside potential according to its last close of $96.43.
Yesterday, Taiwanese Economic Daily reported that Apple has increased its iPhone7 production targets to 72-78 million. The production target is significantly 10 million ahead of the Street’s expectations of nearly 65 million initial builds.
Talking about a number of production variables that require attention, the analyst further noted, “Given the high degree of negativity around AAPL we think initial indication of flat production (y/y) is a positive data point given investor apprehension that AAPL units could be down mid to high single digits through the iPhone 7 cycle.” For the $534 billion company, Mr. Daryanani expects improved gross profit margins quarter-over-quarter. Moreover, if the market conditions are favorable, the analyst projects better comparable store sales for the iPhone.
Apple is expected to launch three latest flagship smartphones in the second half of this year, including iPhone 7, iPhone 7 plus and iPhone Pro/Premium. The ED report further revealed Foxconn’s (a contract manufacturer of iPhones headquartered in Taiwan) efforts to enhance workforce, in order to meet extensive demand for initial production.
RBC Capital has an Outperform rating on Apple’s stock. Data on Thomson Reuters reveals consensus expectations of $126.25 price target, reflecting 30.92% upside potential on the stock.