Apple recently unveiled its highly anticipated iPhone 15 models, and the response from investors and Wall Street has been rather underwhelming. While the announcement didn’t deviate much from expectations, there was one surprise: the absence of a price increase for the iPhone Pro. Many analysts had predicted a hike in price, although Apple did raise the starting price for the Pro Max model by $100.
Traditionally, shares of Apple (ticker: AAPL) have experienced an average increase of 5% in the three months following an iPhone release, according to Dow Jones Market Data. However, on Tuesday, Apple’s stock fell 1.7% to $176.30. In premarket trading on Wednesday, the stock dropped an additional 0.4% to $176.66.
D.A. Davidson analyst Tom Forte believes that this time around, Apple may not be able to rely solely on strong iPhone sales to drive its share price higher. He noted that despite the iPhone 15 release date of September 22nd, management is guiding for a decline in revenue in the September quarter. Forte also expressed concerns about potential lackluster sales in China. As a result, he maintained a Neutral rating on the stock and a price target of $180.
Another analyst firm, KeyBanc, led by John Vinh, shared a similar sentiment. While they characterized the product launch as “slightly negative” for Apple, they maintained an Overweight rating and a $200 price target. Their reasoning is based on their observation that the Pro model lacked expected price increases and that the features presented did not offer a compelling incentive for consumers to upgrade. Additionally, they noted a decrease in carrier promotions for Apple products.
In summary, although Apple’s iPhone 15 launch stayed true to most predictions, it hasn’t generated the usual excitement among investors and Wall Street. As analysts voice concerns about potential revenue declines and lackluster sales, the company’s stock faces uncertainty in the near future.
Evercore ISI Analysts’ View
According to Evercore ISI analysts, the recent Apple launch event was seen as “mildly disappointing.” They believed that a price increase for the Pro version of the iPhone would have helped to counter the impact of Huawei’s new smartphone release.
The analysts explained that investors typically have low expectations for these events, as major changes to the iPhone design or functionality have been scarce. However, they were hoping to see a $100 increase in the cost of the Pro model, which could have offset any potential challenges posed by Huawei’s Mate 60 Pro Launch. Despite their disappointment, they still rated Apple’s stock as “Outperform” with a price target of $210.
Wedbush Analyst’s Perspective
Not everyone viewed the launch event negatively. Wedbush analyst Dan Ives considered the lack of a price increase for the iPhone 15 Pro as a surprise, but believed that the price increase for the Pro Max was a “smart strategic move.”
Ives predicted that a higher proportion of consumers would shift towards the Pro models compared to the basic model. He anticipated a split of 75% for the Pro models and 25% for the basic model, a significant change from the 60% to 40% split observed in recent years. This shift would likely contribute to an increase in Apple’s average selling price, which Ives considered a “major tailwind” for the company. He maintained his “Outperform” rating on Apple’s stock with a $230 price target.
Despite some negative reactions, Dan Ives asserted that Apple’s iPhone 15 would provide additional momentum for the company as it enters the crucial holiday season. He expressed confidence in the continued success of Apple’s consumer product cycle globally.
