Apple Inc. (AAPL) - Get Report shares traded higher Monday after analysts at JPMorgan boosted their near-term outlook for iPhone sales amid what it expects will be "materially improved" investor sentiment.
JPMorgan sees iPhone shipment volumes of around 44 million for the three months ending in December, with that figure rising to 63 million in the following quarter thanks to "solid" demand for 5G smartphones. The bank also reiterated its "overweight" rating on Apple with a December 2020 price target of $265 per share.
Apple shares were marked 1.3% higher in early trading Monday to change hands at $221.74 each, a move that would extend the stock's year-to-date gain to around 40%.
Apple unveiled its new suite of iPhones earlier this month, with product experts focused on the phones' new camera technology and longer batter life while financial analysts on the smartphone's aggressive pricing in U.S. dollars, which was discounted to previous roll-outs, and the impact it would have on the group's overall profit margins.
Apple's gross margins have been narrowing for the past few quarters, falling 700 basis points from the same period last year to 37.6% over the group's fiscal third quarter.
Apple no longer provides a breakdown of iPhone unit sales, making average selling price estimates nearly impossible to calculate, but indicated a 12% year-on-year contraction last quarter as customers -- particularly outside of the United States -- balked at the $1,099 price point for last year's iPhone XS Max.
JPMorgan said Friday that it expects the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max to be the largest driver of Apple smartphone shipments over the next 12 months, and has a calendar 2019 forecast of 185 million units in sales of its entire iPhone suite. The bank sees that number improving to 198 million units in the 2020 calendar year.