Nomura Defends Apple (AAPL)

In addition to defense from Oppenheimer earlier, Nomura Securities analyst Jeffrey Kvaal is also out defending Apple (NASDAQ: AAPL) today. The firm reiterated a Buy rating and $145 price target.

"We believe the significant strengthening in bearish sentiment over the past two weeks belies steady fundamentals," Kvaal said. "We retain our view that Apple has plenty of scope to grow sales both in its subscriber base and from the Android phablet base. Supply-chain data points do not support widespread order cancellations."

Kvaal said supply chain order patterns reflect bottlenecks, not cancellations. "Fears of broad order cancellations in Apple’s supply chain driven by soft China demand appear exaggerated to us," he said. "Our Taiwan Technology team, led by Anne Lee, notes that some suppliers, such as Catcher, have not seen cancellations over the past month. Bottlenecks may defer demand slightly for some vendors, but stable orders and an on-track 6S launch suggest fears will be short lived."

The analyst said their work indicates healthy opportunity within the Apple base. "We believe the 6S will enter a subscriber base no more penetrated with the 6 than a typical launch – likely the low end of our 35-40% range," he said. "We believe Apple’s strong iPhone 6 launch in Dec-14 was followed by sharper-thannormal sequential declines in the March and June quarters."

Also, switchers from the mid-tier Android phablet market an opportunity. "We also expect a priced down iPhone 6 to have particular success in the sizeable base of Android phablet users," Kvaal said. "This includes the China market in particular, where demand appears solid for now."

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 $115.52 yesterday.

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