The new iPhone models were officially launched on Friday. The devices are available in the U.S., Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the U.K. Apple releases the devices in an additional 20 countries on Friday, Sept. 26, and the phones will be available in 115 countries by the end of the year.
Apple said last week that pre-orders for the iPhone 6 and 6 Plus hit a record 4 million devices within the first 24 hours, exceeding supply. The two new models are available in a 4.7-inch and 5.5-inch Retina HD displays.
TheStreet's Brittany Umar takes a closer look at the numbers behind Apple's record iPhone 6 and 6 Plus sales:
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"Sales for iPhone 6 and iPhone 6 Plus exceeded our expectations for the launch weekend, and we couldn't be happier," said Apple's CEO Tim Cook in a press release. "We would like to thank all of our customers for making this our best launch ever, shattering all previous sell-through records by a large margin. While our team managed the manufacturing ramp better than ever before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible."
Apple shares were rising 0.36% to $101.32 on Monday. Here's what analysts said about the weekend's iPhone sales.
Brian White, Cantor Fitzgerald (Buy; $123 PT)
Given the supply chain constraints around the iPhone 6 Plus, the weekend results that Apple is expected to report this morning would be much higher, in our view. For investors, we believe it is more important to focus on Apple's "super cycle" that we expect will keep the stock heading in an upward trajectory, as reflected in our 12-month price target of $123.00.
Based on our survey work, Apple retail stores sold out of the gold-colored iPhone 6 the fastest, followed by silver and then space grey. Gold has traditionally been an ultra-popular color in Asia and especially China; however, we believe the release of the gold iPhone 5s last fall has swayed tastes in the U.S. and this could eventually allow Apple to differentiate itself with gold-colored iPads and Macs in the future.
We reiterate our Buy rating and $110 target price. We are modeling 11-12 million iPhone 6 units the first weekend and 15 million / 45 million in the September and December quarters with demand surpassing supply. Our scenario shows each 1 million iPhone 6 has an EPS impact of $0.03-$0.04. Recall our thesis also includes Device Acceleration where carriers are making it easier than ever to upgrade customer smartphones including before the typical 2-year contract period is over. We are very encouraged by the initial strong demand and note the importance of continued strength as well as the need for an iPhone 6 China launch as China represents ~17% of sales. We believe Apple's supply chain will benefit from these strong demand trends and phased launch as demand is far surpassing supply.
Maynard Um, Wells Fargo Securities (Market Perform; $89-$99 valuation range)
Apple released it has sold over 10MM of the new iPhone 6 and 6Plus over the opening weekend. The weekend unit sales are generally in line with our expectations and up from 9+MM for the iPhone 5s/5c launch and 5+MM for the iPhone 5. Assuming the sales of new phones as a percentage of total phones sold in the quarter is consistent with last year's launch quarter, we estimate Apple will sell roughly 37-38MM units in the September quarter, which is slightly higher than our 36MM estimate (every 1MM units equates to roughly $0.03 in EPS , all else equal). Looking at the next quarter, if we assume similar sequential growth from 37-38MM to last year, this would imply Apple could potentially sell about 57MM units (our estimate is 58MM). From an iPhone supply perspective, we believe consensus is that Apple can build roughly 70MM units (some estimates as high as 80MM) through calendar year-end, suggesting there could be some upside though we believe widely expected. On the one hand, the 10+MM units is positive given some expectations for a lower number and despite the fact that the iPhone 6 stock did not sell out as quickly as last year's 5s launch. However, the latter point is interesting as it suggests Apple was either better prepared with inventory or iPhone 6 demand (versus 6 Plus, which sold out quickly) could be softer than expected.
Gene Munster, Piper Jaffray (Overweight: $120 PT)
Apple announced 10 million iPhone 6/6 Plus units were sold on opening weekend this year vs 9 million during the iPhone 5S/5C launch last year. Based on better y/y availability for the 6 vs the 5S and essentially no availability of the 6 Plus, we believe that the opening weekend numbers may suggest sell-through of 8 million or slightly more units vs our estimate of last year's 5.5 million 5S units (45% y/y growth). We continue to believe there could be up to 9% upside to Street revenue and 12% upside to Street EPS in Dec-12. We reiterate our Overweight rating and $120 target.
We continue to believe that the combination of Apple's 4 million 24 hour pre-order number, 10 million opening weekend number, and our survey work in terms of purchase intent for iPhone 6 Plus and higher capacity SKUs suggests there could be 9% upside to Street Dec-14 revenue and 12% upside to EPS. First, in terms of units, we believe it might be safe to assume a 25-45% y/y growth for iPhone 6/6 Plus vs the iPhone 5 based on the 100% pre-order growth. Our range of 25-45% growth off of the iPhone implies a range of 56.7-62.7 million units based on our current 54.5 million total iPhone estimate for Dec-14. The mid-point of our assumption range of 35% y/y for iPhone 6/6 Plus unit growth off of the iPhone 5 would imply 59.7 million total iPhone units in Dec-14 while we believe the Street is currently at around 59 million units. Second, for ASPs, we believe ASPs in Dec-14 could be ~$695 vs our current $630 based on the addition of the $100 more expensive iPhone 6 Plus and a shift to higher capacity and higher ASP SKUs. Finally, we believe the shift to the higher capacity and higher margin units in addition to our belief that the iPhone 6 Plus has a higher margin than the 6 we believe implies Dec-14 gross margins in the 38-38.5% range vs the Street at 37.5-38%.
TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although AAPL's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 44.56% is the gross profit margin for APPLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.69% is above that of the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 53.34% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full analysis from the report here: AAPL Ratings Report
-- Written by Laurie Kulikowski in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.