Apple will gain another 32% on bullish outlook for the iPhone 12 and 5G technology supercycle, Wedbush says
- Strong demand for the iPhone 12 will set Apple's shares up for a 32% gain in 2021 as it smashes previous sales records for its mobile phones, Wedbush said on Tuesday.
- Wedbush expects the iPhone maker to sell more than 240 million units next year, compared with Wall Street estimates of 215 million.
- "With more order activity kicking in over the last few weeks for iPhone 12, our initial reads are very bullish and give us incremental confidence in our supercycle thesis on iPhone 12," strategists said.
- Apple's iPhone 12 model with 5G connectivity will be vital to demand from China and will be key to the company's upgrade "supercycle," according to Wedbush.
Apple's stock could gain 32% in 2021 as the company is on track to smash previous records for sales of its iPhone next year, Wedbush said on Tuesday.
A report showed Apple is planning to produce up to 96 million iPhones, up 30% year-on-year and higher than Wall Street expectations, in the first half of next year. The company may overall sell 230 million older and new iPhone models in 2021, according to the report, above consensus forecasts of 215 million.
Apple shares gained nearly 2% in pre-market trading after the report.
But Wedbush analysts Dan Ives and Strecker Backer offered an even more bullish outlook, saying they expect Apple to sell over 240 million iPhones, which would handily beat its previous record of 231 million sold in 2015.
There is massive demand for the iPhone 12 from consumers looking for a phone upgrade with its refreshed design, a better screen on the standard model, and night mode on all cameras.
"With more order activity kicking in over the last few weeks for iPhone 12, our initial reads are very bullish and give us incremental confidence in our supercycle thesis on iPhone 12," they wrote in a note.
Company supply chains can expect a boost in production owing to outsized demand for the latest iPhone model.
"We have not seen a launch uptrend such as this in a number of years for Apple and the only iPhone trajectory similar would be the iPhone 6 in 2014 based on our analysis," the strategists said.
iPhone 12 pre-orders more than doubled those for the preceding iPhone 11, pointing to a strong start for the company on its "flagship supercycle product," Wedbush noted. The firm maintained its outperform rating on Apple stock and projected a 12-month price target of $160 per share.
China remains a vital component for Apple's 5G supercycle as it could account for as much as 20% of upgrades to the iPhone 12. The iPhone 12's range with 5G connectivity is a key reason why the phone will be popular in China.