BMO Capital Markets bumps Apple Inc. PT to $135 on iPhone 6 upgrades and Watch sales


apple watch

BMO Capital Markets increased its price target on Apple Inc. (NASDAQ:AAPL) to $135 and boosted the company to outperform. Analyst Keith Bachman cited increased confidence that iPhone installed base will upgrade to latest iPhone 6 resulting in sales of 207 million iPhones in calendar year 2015. Bachman also sees 19 million Apple Watches sold this calendar year.

207 million iPhones “perhaps conservative”

Bachman projects calendar year 2015 sales of 207 million units, and believes that figure is “perhaps conservative.”

The BMO analyst estimates the total iPhone installed base at 220 million users in 2012. Those 2012 customers will become eligible for upgrades and it would take 94 percent of them upgrading to hit his target.

19 million Apple Watch devices

Bachman’s numbers assume that by year end 2015 the Apple Watch will be on the wrist of 4 percent of the 420 million users in the estimated iPhone install base. His projections call for 19 million Apple Watches in the calendar year. 10 million of those are expected to come in the next December quarter.
Further into the future, he believes by 2016, the Apple Watch, will reach 16.8 percent of the iPhone 6 installed base.

Outperform

BMO has an outperform rating with its $135 price-target and in conclusion the analyst wrote, “Apple’s current iPhone offering, pending the Watch launch and the strength of Apple’s family of products, combined with Apple’s large and loyal installed base, gives us confidence in our iPhone forecast,” he wrote.

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