Apple (AAPL) Watch Estimates Cut, iPhone Estimates Raised at BMO Capital

BMO Capital analyst Keith Bachman raised iPhone estimates while trimming Watch estimates on Apple (NASDAQ: AAPL). The firm maintained an Outperform rating and price target of $145.

In FY2016, they are raising iPhone estimates by 3.5 million to 233 million units and lowering Watch estimates by 3 million to 27.5 million units. In the June 2015 quarter, they are raising iPhone estimates to 48 million units but not changing Watch estimates (3.5 million units).

"We believe the iPhone installed base will be well over 500 million by the end of CY2015," Bachman commented. "Therefore, we believe that upgrades should contribute about two-thirds of iPhone shipments in CY2016. We believe Apple will need to generate about one-third of new iPhone users to meet our CY2016 forecast. We believe many of the new users will need to come from emerging markets or from converts in established markets, as we think penetration rates are high in established markets. As a check, we compare our projected new iPhone users against BMO’s expectations for the emerging market smartphone unit TAM in CY2016. If all new iPhone users were generated in emerging markets, we believe that Apple would need to obtain about a 7% market share in CY2016, which we do not think is an aggressive assumption."

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $120.07 yesterday.

You May Also Be Interested In

• Apple (AAPL) PT Raised to $400 at TD Cowen
• Thermax Ltd (TMX:IN) PT Lowered to INR5,100 at UBS
• Sun Pharmaceutical Industries Ltd. (SUNP:IN) PT Raised to INR2,150 at Kotak