J.P. Morgan analyst Mark Moskowitz this morning raised his estimates for Apple for the December quarter, reflecting a higher forecast for iPhone sales, offset in part by a reduced outlook for iPad sales. The analyst maintains his Overweight rating and $525 price target.
“Our research inputs indicate that iPhone sales remain robust, and Mac sales holding up,” he writes in a research note. “The thrust of our call is that we are increasing iPhone estimates but slightly trimming our iPad estimates. Despite the uncertain macro environment, we expect Apple to sustain above-peer revenue growth, upward-trending margins, and incremental market penetration opportunities to fend off competitive and economic challenges.”
For the quarter, he now sees revenue of $38.69 billion and profits of $9.87 a share, up from $37.26 billion and $9.45. Street consensus is $38.02 billion and $9.78. His new gross margin forecast is 40.7%, up from 40.4%; operating margin goes to 31.6%, from 31.4%.
He now sees sales of 28 million iPhones in the quarter, up from 25.3 million previously. His fiscal 2012 forecast is now 105.5 million, up 4.2 million; for 2013 he goes to 121.7 million, up 1.5 million.
For iPads, his new forecast is 13 million, down from 13.3 million. “We see no structural change to the iPad demand environment, but there has been limited uplift in build activity,” he writes. “To a lesser extent, the Amazon Kindle Fire’s better-than-expected momentum with more price sensitive consumers is a factor, too. Longer-term, we still expect the iPad’s ongoing momentum in commercial environments to accelerate.”
For the Mac, he continues to see 5.4 million units in the quarter. “Our conversations with industry participants suggest that MacBook Air momentum continues, and we do not anticipate major competition from Ultrabooks, yet,” he writes.
