Apple's stock has not seen a new iPhone. This could help
Apple shares $AAPL+0.6% plunged after the release of the iPhone 15 as analysts were skeptical about whether it would boost sales. But new data could change that view.
According to Daniel Ives of Wedbush, the start of iPhone 15 pre-orders brings good news for Apple (AAPL). In his research report, he wrote that based on Wedbush's analysis, pre-orders are up 10 to 12% from Sunday compared to the same period for the iPhone 14. The smartphone is due to go on sale in stores from this Friday.
"Our supply chain checks in Asia this weekend give us increased confidence that the iPhone unit count should be roughly 85 million units out of the gate and could approach 90 million as the already ongoing eye-popping operator promotions will be a major catalyst for upgrades into the holiday season," Ives wrote.
Apple's stock could use a boost. They fell 0.2% to $174.69 in pre-market trading. Shares have fallen from highs of around $195 in late July, partly due to concerns about a ban on iPhones by Chinese government officials,
Ives says there's more good news in the early iPhone 15 data - pre-orders are skewed toward the more expensive Pro and Pro Max models. Wedbush predicts that Apple will achieve an average selling price of around $925 for the iPhone 15, which is about $100 more than it has been selling iPhones for the past 12 to 15 months.
The popularity of the more expensive models is confirmed by some publicly available data, as Apple has pushed back the iPhone 15 Pro Max's shipping dates to November in some countries, including the US.
"While I'm not a big fan of the long setup at Apple in the near term, I would be cautious even on the short side given this expected iPhone 15 data," Mizuho analyst Jordan Klein wrote in a research note on Monday.
PayPal shares will remain under pressure even after Alex Chriss takes over as CEO, says MoffetNathanson
Shares of PayPal Holdings Inc (PYPL) could still underperform expectations despite a reset with a new CEO, according to MoffetNathanson.
The firm downgraded PayPal stock to Market Perform from Outperform and lowered its target price to $75 per share in a report on Monday. MoffetNathanson's forecast implies a roughly 17% increase from Friday's closing price of $64.21.
Shares of PayPal $PYPL+3.4% have plunged nearly 10% since the beginning of the year and were down 1.4% in pre-market trading Monday.
Analyst Lisa Ellis says that despite a potentially promising new start for the company with new CEO and former Intuit executive Alex Chriss on September 27, PayPal will still be below MoffetNathanson estimates.
"Going forward, unfortunately, we expect PayPal's gross profit growth to remain lackluster, in the low to mid-single digits, and we see the potential for further downgrades to our estimates, particularly given the strong momentum of Apple Pay, which we fear will begin to benefit from strong network effects in the payments space," Ellis said.
Ellis added that further headwinds related to Venmo's weak growth, as well as a narrowing set of opportunities to reduce operating costs, will frustrate PayPal in the near term.
"As a result, while we are excited about the fresh start at PayPal under the leadership of new CEO Alex Chriss, we believe the coming year is unfortunately likely to continue to be a challenging journey for the company," she said.