Pacific Crest‘s Andy Hargreaves today pounds the table on Apple (AAPL) shares, reiterating an Outperform rating and a $760 price target, while insisting on his estimate that Apple will sell 51 million units of its iPhone 5 in this fiscal Q1 ending December.
iPhone 5� “demand is strong,” writes Hargreaves, judging by long lines on the day of its debut at Apple stores, and judging by wait times for online orders.
Writes Hargreaves, “We believe the current stock price underestimates Apple�s earnings power through the iPhone 5 and iPad mini product cycles and the sustainability of a replacement cycle given Apple�s massive and stillgrowing iPhone and iPad user bases.”
Hargreaves does express concern that reported production issues could somewhat hamper the roll-out of a rumored smaller version of Apple’s iPad.
We believe quality issues with initial iPad Mini production have forced a larger percentage of FQ1 production into November and December. We believe Apple still plans to build enough units to meet our 10 million unit estimate in FQ1, but any additional issues would likely drive downside to our estimate.
A report Friday morning by AllThingsD‘s John Paczkowski said an unveiling of the device was still set for October 23rd.
Apple shares today are down $1.58 at $628.14.
Update: In a related note, R.W. Baird‘s William Power writes today, in his usual weekly roundup of all things smartphone, this his calls to stores reveal tight supply for the iPhone 5 at both Apple and carrier stores:
Apple stores have moved almost exclusively to selling the iPhone 5 through the nightly online reservation system and through the apple.com waiting list. Among the stores that we contacted, we were unable to find iPhone 5 devices of any carrier or memory size available for walk-in purchase. Similar to last week, we were unable to find inventory through the online reservation system, though Apple reps assure us that other people are successful in ordering the device this way. The wait time for consumers that order their iPhone through the traditional Apple.com website is still 3-4 weeks. Supply is still very tight in the carrier retail channel, and reps continue to suggest that we sign up on their waiting list or order the device online. That said, we were able to find more stores that had product on hand this week, which implies that supply may be improving however modestly. Frequently the devices that were available were 32GB or 64GB and black. Supply was even tighter at Best Buy (BBY) and RadioShack (RSH) stores than at carrier stores, with the vast majority of stores noting they had zero inventory. In fact, several Best Buy stores we checked were still working through their initial pre-order list from September 21, which indicates that any inventory they do receive is already claimed. That said, in some geographies we were able to find an occasional store with devices for sale.
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