Evercore ISI maintained a positive outlook on Apple Inc. (NASDAQ:AAPL) shares, reiterating an Outperform rating and a $250.00 price target. The firm's analysis followed the recent launch of Apple's iPhone 16 lineup, which began its presale phase on Friday evening. The delivery times for the iPhone 16 Pro model have increased compared to last year across all monitored regions, including the United States, China, Japan, the United Kingdom, and Germany.
The extended delivery times, particularly for the iPhone 16 Pro in the United States and China, are seen as an encouraging sign of strong demand. In the United States, delivery times for the Pro model have reached 17 days, up from 7 days for its predecessor, while in China, the wait has extended to 24 days from 18 days previously.
The analyst noted that the increased delivery times in China are significant, suggesting robust performance of the flagship Pro model in the face of competition from Huawei's new Mate X product.
In contrast, delivery times for the Pro Max version are shorter than those for the Pro model, though they still exceed 20 days in every region tracked. The more affordable iPhone 16 and 16 Plus models show availability within 4-5 days, a slight improvement from the 6-7 days seen last year.
The report also discusses the normalization of the supply chain environment following disruptions caused by the COVID-19 pandemic. The analyst pointed out that it remains uncertain whether the longer delivery times are a result of increased demand or supply chain factors.
However, the trend is believed to support the thesis of a gradual increase in iPhone sales as the rollout of Apple Intelligence features progresses.
Evercore ISI expects a "stronger for longer" iPhone cycle due to the staggered nature of the Apple Intelligence rollout. The firm concludes that the delivery times indicate a year-over-year increase in demand for the Pro models, with demand for the base and Pro Max models remaining stable or slightly declining.
Apple Inc. is experiencing mixed responses to its new iPhone 16 lineup, according to recent analyst reports. Barclays (LON:BARC) maintained an underweight rating on Apple shares (NASDAQ:AAPL) due to early pre-order data from China indicating a weaker start for the iPhone 16 cycle. Conversely, BofA Securities and Citi maintained neutral and buy ratings respectively, citing extended ship times for Pro and Pro Max models as an indicator of strong demand.
Jefferies reported contrasting demand levels for iPhone 16 Pro and Pro Max models across different markets, with strong interest in the Pro Max model in China potentially leading to an increase in Apple's average selling price.
Recent developments also include the U.S. Food and Drug Administration's authorization of Apple's AirPods Pro as over-the-counter hearing aid software. The Court of Justice of the European Union has ordered Apple to pay €13 billion ($14.4 billion) in back taxes to Ireland, a decision expected to impact Apple's earnings per share for fiscal year 2024 by around 10%.
In the realm of artificial intelligence, OpenAI, the creator of ChatGPT, is in the midst of a significant financing round that could value the company at $150 billion, contingent on successful restructuring. Key investors such as Thrive Capital, Khosla Ventures, Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), and Apple are expected to contribute.
InvestingPro Insights
As Evercore ISI highlights the promising signs of demand for Apple's latest iPhone 16 lineup, real-time data from InvestingPro complements this outlook. Apple Inc. (NASDAQ:AAPL) boasts a significant market capitalization of $3.28 trillion, underscoring its dominance in the market. With a P/E ratio of 32.61, Apple trades at a premium, reflecting investor confidence in its future earnings potential. This is further substantiated by the company's impressive gross profit margin of nearly 46% over the last twelve months as of Q1 2023, indicating strong operational efficiency.
Two notable InvestingPro Tips for Apple include its track record of raising its dividend for 12 consecutive years, demonstrating a commitment to returning value to shareholders. Moreover, the company is recognized as a prominent player in the Technology Hardware, Storage & Peripherals industry, which may reassure investors of its competitive positioning. For investors seeking further insights, InvestingPro offers additional tips on Apple's financial health and market performance. Currently, there are 15 more InvestingPro Tips available that can provide a deeper understanding of Apple's investment profile.
The blend of Evercore ISI's analysis with InvestingPro's real-time data and tips provides a comprehensive view of Apple's market position following the launch of its iPhone 16 series. With a robust financial foundation and investor confidence as reflected in its market valuation, Apple continues to be a key player to watch in the technology sector.
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