Mr. Wu’s research note came in response to clients asking about rumors that demand for the iPad has been soft. Mr. Wu said that demand remains strong for the device, and that any hint of a decrease in production coming out of Asia is due to supply constraints on the supply of retina displays, rather than a decrease in demand.
“What we are picking up are strong follow-up demand trends for the new iPad despite a very strong start of 3 million units sold in the first few days,” the analyst wrote. “We believe this is likely because the new iPad is a significant upgrade with an HD retina display, quad-core graphics, and 4G LTE wireless. In addition, the price cut on the iPad 2 appears to be helping as well.”
Mr. Wu said he was raising his estimates for the just-completed March quarter from 11.5 million iPads to 12.3 million. For calendar 2012, he raised iPad estimates from 60 million units to 63 million.
For fiscal 2012, the analyst is now modelling $161.2 billion in revenue and $44.50 in earnings per share (EPS). That’s up from $160 billion in revenue and $43.80 billion in EPS. Consensus estimates is currently at $160 billion in revenue with EPS of $44.19.
He bumped estimates for fiscal 2013 to $186 billion in revenue and $51 EPS, up from $184.4 billion in revenue and $50 EPS. That still leaves Mr. Wu below revenue consensus for fiscal 2013, however, which stands at $189.8 billion. EPS consensus is $50.45.
All of which means a new price target, which he increased from $740 to $750. He maintained his “Buy” rating.
Shares in Apple closed at $626.20, down $2.24 (-0.36%), on moderate volume of 24.8 million shares trading hands. The broader markets also finished in positive territory.
Arrow graphic courtesy of Shutterstock.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.