Credit Suisse’s Kulbinder Garcha has upgraded (http://tinyurl.com/p2bdljb) Apple to Outperform two weeks before its fiscal first quarter (FY 15) financial report, and hiked his target by US$20 to $130.
He’s calling for 215 million FY15 iPhone sales, and a similar amount for FY16. The FY15 forecast assumes the acquisition of 76 million users for rival platforms, and a pickup the global iPhone replacement rate to 21 months. A 31.8% FY15 increase in purchase obligation guidance is seen as an indicator of strong demand.
Garcha also expects Apple to “announce a sizable increase in its cash return program for the next three years through the end of 2017 to over $200 billion.” That’s $165 billion or buybacks and $37 billion for dividends. He forecasts 20 million 2015 Apple Watch sales at an average price of US$400 and 50% gross margin.
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