Apple Stock Analysis: Holiday Shopping Season Will Boost Apple’s Sales

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

Apple Stock Analysis

Summary:

  • It’s time to go long AAPL. The Christmas shopping season is here soon.
  • The global recall of Galaxy Note 7 and holiday sales could make up for the declining iPhone sales in China.
  • I expect the Christian/Catholic community around the world to boost sales of iPhones, iPads, and iMac computers this last two months of 2016.
  • Digitimes reported that Apple has increased its fourth-quarter production orders for the iPhone 7. I expect Apple to sell 60-70 iPhones this Q4 2016.
  • The short and long-term algorithmic forecasts of Apple are very positive.

Digitimes reported last week that Apple (AAPL) increased Q4 production orders for its iPhone 7 products. This is enough clue that Apple expects this holiday quarter to post better-than-expected iPhone sales. I therefore urge the investing public to consider going long on AAPL now.

The Christmas quarter is always the busiest period for Apple’s iPhone sales.  Apple’s stock will likely hit $120 after it reports its Q2 2017 earnings in January. The global recall of Samsung’s Galaxy Note 7 should inspire phablet-using people to go for the iPhone 7 Plus.

Winning the approval of Galaxy Note customers this last quarter of 2016 can be a new source of growth for Apple. Stronger global iPhone sales this Christmas shopping period could offset Apple’s faltering smartphone sales in China.

North American and European Christmas holiday shoppers could still deliver impressive iPhone sales in spite of the declining sales in China.

Apple Stock Analysis

Apple derives almost 70% of its revenue from iPhone sales. Any development or event which could help boost iPhone sales is therefore important.  Samsung’s batterygate problem over the Galaxy Note 7 compels me to believe that many holiday shoppers will likely buy the iPhone 7 Plus to replace their recalled Note 7 Android phone.

Yes, Samsung has also increased production of its Galaxy S7 and S7 Edge to hopefully retain the loyalty of pissed-off Note 7 owners. However, the Samsung brand is already tarnished with the exploding/fire-prone battery of the Note 7. In my view, even the Galaxy S7 and S7 Edge (which never had any battery problems) are also affected. Public perception now is that it would be safer to buy the new iPhone 7 over Samsung’s high-end phones.

Business users who love the Galaxy Note line of products could shift their affinity to the iPhone 7 Plus.  Apple’s flagship handset does not have a bundled stylus but there are cheap third-party stylus products that could work with the iPhone 7.

I am envisioning companies buying hundreds or thousands of the iPhone 7 Plus to reward their best employees this Christmas. I can imagine husbands buying the iPhone 7 Plus as gifts to their wives or children. A South Korean analyst already predicted that 100 million units of the iPhone 7 will be sold before 2016 ends. This prediction was made before the Galaxy Note 7 recall.

Samsung’s expensive recall ($4.57 billion drop in operating profits) of the Galaxy Note 7 is boon to Apple. I expect Apple to sell 60-70 million iPhone 7 units over the last two months of 2016. Apple will likely be the top beneficiary (this holiday shopping season) of Samsung’s recall of the Galaxy Note 7. The people who buy pricy phones like the Note 7 are not likely going to replace it with a sub-$400 Xiaomi Mi5 or Huawei Honor 8.

Conclusion

Unless Samsung can release a new flagship phone before December, it will be able to offer the older Galaxy S7 and S7 Edge to holiday shoppers. The iPhone 7 and iPhone 7 Plus are newer phones so they become the default choice for Christmas gift-givers.

It also helps that the iPhone 7 Plus outperforms the Galaxy Note 7. Big-spending phone buyers expect their phablet to offer the fastest performance.

Apple Stock Analysis

(Source: PC Advisor UK)

Aside from stronger iPhone sales, I expect Apple to also make a killing on selling its new MacBook Pro laptop. It’s been four years since Apple made a major redesign of its flagship laptop. Prolonged anticipation tells me that there are millions of eager customers who will line up to buy the MacBook 2016.

The October-December quarter is also the best season when Apple sells the most of its Mac products. Improved sales of the iPhone 7 and Mac computers should boost AAPL’s price to $120 in January. The near and long-term algorithmic forecasts from I Know First are very favorable for Apple’s stock. Let us trust the mighty forecasts of I Know First.  There is greater probability that AAPL will post positive returns within the next 3 months or one-year  period.

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An analysis of the long-term technical indicators and moving averages are also saying AAPL is a Buy right now.aapl3

(Source: Investing.com)

I Know First Past Success With AAPL

I Know First has been bullish on AAPL in past forecasts. On July 5th, 2016, an I Know First analyst had written a bullish article regarding Apple’s global innovation, in accordance with our state of the art algorithm. Since then, AAPL has risen almost 19% to date.

This bullish forecast on AAPL was sent to current I Know First subscribers on July 3rd, 2016. To subscribe today click here.


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