Apple Inc. needs to convince traders that it’s still able to grow despite the success of the iPhone 6. Since the firm’s release of its June quarter earnings, Wall Street has been skeptical of the firm’s sales numbers, and total revenue, from the latest generation of smart phone. Daniel Ives reckons there’s just number that Apple will have to hit to keep traders happy this time around, but it is a big one.
75 Million. Mr. Ives, who works for FBR Capital, says that Apple will need to guide for sales of 75 million or more in the final three months of calendar 2015 in order to keep Wall Street on its side. iPhone sales for the three months through September, which Apple will announce on October 27, won’t include many sales of the iPhone 6S.
Finding Apple growth
Apple has perplexed before by growing its smart phone sales from year to year, but after the massive growth of the iPhone 6, and the market across the globe filling up, that may not be possible for much longer. Mr. Ives said that a solid fourth quarter outlook would be a major boon to the firm’s value.
In his view, Wall Street will focus on that outlook when Tim Cook and Luca Maestri step up to the plate in a couple of weeks time. “A 75 million number being the bogey,” Ives says, meaning that coming in below that could hurt Wall Street’s confidence in future sales at Cupertino.
Ives reckons that, in fact, Apple will secure year over year growth in iPhone sales in 2016, despite what some on Wall Street are saying about slow demand from China and a glutted market in the Western world. Ives says that “the narrative for the Apple story rests on the shoulders of 6s with “good enough” December guidance starting to turn the tide in a positive direction, in our opinion.”
Looking forward to Apple’s future
Mr. Ives is very hopeful about the future of Apple , and it’s likely that his hope won’t be hurt much if the firm fails to list that 75 million number at the end of the month. He has a price target of $175 on the firm’s shares, and a clear belief that Apple is worth a lot more than the market thinks right now.
In his report Mr. Ives said that “Apple has become a battleground stock given the confluence of China headwinds, worries about 6s growth prospects, and uninspiring June results.” He reckons that solid guidance for the fourth quarter may still that battle, but the rest of the world doesn’t seem so sure.
In a report published on Wednesday OTR Global said that Apple will only manage to scrape the sales records set last year with the release of the iPhone 6S. The firm said that the reason behind the miss lies directly with the lack of innovation on the firm’s part.
We’ll have to wait until October 23 to see which side of Wall Street is right about Apple, but it’s clear that most research houses have faith in Tim Cook and hit team yet. The mean price target on the firm right now stands at $150.