KeyBanc analyst Brandon Nispel has shared his insights on the early performance of the iPhone 16, revealing a mixed bag of results. His September carrier survey indicates that iPhone 16 sales were slightly weaker than anticipated, falling short of both store expectations and typical seasonal trends. While demand for the iPhone 16 Pro and Max models remains healthy, attributed to their enhanced camera features, the base models have struggled to gain traction.
However, Nispel’s Key First Look Data, which examines spending trends at Apple Stores, paints a slightly more optimistic picture. This data reveals a year-on-year increase in iPhone demand, with Apple Store iPhone spending surging by 15% during the first ten days of the launch and 7% growth over the launch weekend. This growth trend is even more pronounced when looking at indexed spending, which shows a month-over-month jump of 22% in September, exceeding the three-year average of 2%.
Despite these positive indicators, Nispel cautions that the initial demand boost may be influenced by factors beyond the iPhone 16’s appeal. The availability of the iPhone 16 for two additional days compared to the previous year contributed to the higher spending, and there was also a boost from sales of the iPhone 15 before the iPhone 16 launch. While the early demand was slightly better year-on-year, this trend seems to be tapering off quickly.
In analyzing the broader impact on Apple’s supply chain partners, Nispel’s combined carrier survey and Key First Look data suggest a neutral outlook. This analysis encompasses companies such as Broadcom, Cirrus Logic, Qualcomm, Qorvo, and Skyworks Solutions, all of which are integral to Apple’s iPhone production.
Based on his analysis, Nispel maintains an Overweight rating and a price target of $210 for Broadcom, emphasizing the company’s strong position in the market. Similarly, he reiterates an Overweight rating for Cirrus Logic with a price target of $165. For Qualcomm and Qorvo, Nispel maintains a Sector Weight rating with fair values of $167 and $100, respectively. Finally, he remains Sector Weight on Skyworks Solutions with a fair value of $95.
Nispel’s outlook on Apple itself is optimistic, with a fair value of $216 based on a projected 2025 adjusted EBITDA. This assessment positions Apple favorably in comparison to other tech giants.
As of Tuesday’s market close, Apple stock is up 1.43% at $224.85.
