Melius Research Reiterates Buy on Apple, $370 PT
Melius Research reiterated a Buy rating and $370 price target on Apple (NASDAQ: AAPL).
“We Like the iPhone Duo: We were at the launch today of the iPhone Duo with new CEO John Ternus and Apple management.
It was a very happy “big launch” vibe in Cupertino as the video presentation did a good job highlighting the entire team.
The price increases for the phones were all a bit lower than we expected, while the battery life improvements were impressive.
The Apple Watch had some sneaky good software updates (note taking, etc.) and pricing for new AirPods were attractive.
However, what stood out to us was how thin the Duo was (each side was thinner than iPhone Air) – and yet it was so sturdy, especially at the seam in the middle.
In addition to the big screen and amazing software, the killer feature really may turn out to be how the camera works.
The subject of the picture (those posing) can see themselves posing on the back of the Duo while the picture-taker aims.
If you have 3 daughters like I do, you know this will be big since it will decrease cries of “bad pictures” and increase the joy – especially for folks who use social media (I’m going to be buying 3 Duos now….).
Bottom Line: The price increases of $100 for the base model iPhone Pro and Pro Max was $100 less than we expected and going to help demand.
Also, the price of $1,999 for the base model of the Duo was more attractive than we thought and we don’t see any reason that Apple can’t sell 15mm in units in FY27 as long as it can get supply (seems mid teens builds are possible).
We think the higher ASP means consensus revenue growth for iPhone for FY27 of only 9% has multiple hundreds of basis points of upside, with 20% possible now for the next 2 years.
We also believe the company will launch more new products later in FY27 while continuing to be a big share gainer in Macs, and lowered the bar near-term in part so Ternus can get off to a running start.
Our target remains $370 and we reiterate buy rating.”
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