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Apple Inc. Watch Pre-Orders: Here’s The Analyst Response

Apple Inc. beats music

Apple Inc. (NASDAQ:AAPL) opened itself up to preorders of its wearable, the Apple Watch, last Friday and estimates of sales are in. According to early reports, the company sold around 1 million units of the Watch in preorders in the first day of availability.

Apple watch

Analysts from across the spectrum have weighed in on the sales numbers. Here’s what they had to say about the release, and what they expect the impact on Apple stock to be.

Analysts react to Watch orders

Piper Jaffray: Claiming the crown for the most accurate prediction, Piper Jaffray analyst Gene Munster warned on Sunday that his prediction might not have been bearish enough. The analyst, in a note about the Apple Watch launch, said that production problems could mean the Cupertino company will actually ship fewer than his 1 million unit estimate, the most bearish estimate in the week leading up to the launch of the Apple Watch.

 

Cowen and Co.: Sticking with the thrust of other reports, Cowen & Co. also reckons that Apple managed to sell 1 million units of the Apple Watch in the first weekend the Watch was available. The analysts had other interesting data to share including an estimated 85-90% conversion rate for Watch viewing appointments. The intent to buy of those viewing the Apple wearable is apparently incredibly high.

Cantor Fitzgerald: Highlighting the positives, Cantor Fitzgerald said that the Apple Watch “”gotten off to a strong start.” The research house’s analyst Brian White has a massive $180 price target on Apple stock, which translates into a $1 trillion market capitalization.

KeyBanc: Getting more involved in the discussion of the potentials of the Apple Watch now that strong starting sales are secured, KeyBanc said “At a minimum, the widespread buzz may cause something of a standstill in the watch market.” The analysts are expecting Apple to produce up to 20 million Watch units in the calendar year 2015.

Apple analysts sit back

Most of the analysts that cover Apple neglected to comment directly on the pre-orders for the Watch. At this stage very little is properly known and even less is likely to be material to movements in the company’s stock price in the coming years. In the week ahead, however, more and more analysts will likely begin to comment on the numbers they expect Apple to announce for Watch orders.

Apple will release its earnings numbers for the the first three months of 2015 on April 27, the Monday following the first weekend of Watch shipments. The Watch was not on sale in the company’s March quarter and won’t feature in its earnings report as a result. It may, however, be the subject of a lot of questionings on the earnings call.

Apple shares ignore Watch moves

Apple shares barely moved on the revelation of Watch preorder numbers today. The company’s stock closed on Monday trading at $126.69, down 0.32% for the full day’s trading. Whether it hits the highs expected by bulls or the lows expected by bears, the Apple Watch is not going to be a substantial part of the company’s business until much later.

That means that Apple shares will continue to move based on what moved them before the release of the Watch: iPhone sales. The vast majority of the company’s revenue still comes directly from the smartphone, and a good deal of the rest of the company’s sales are an indirect result of its popularity.

For now the Watch is a curiosity and a sign of things to come for analysts and investors. It’s not yet a product worth taking into consideration when deciding whether or not to buy into Apple stock for the long tun. 

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