After conducting first-hand checks and conversations, KeyBanc found inventories of Apple Inc. (NASDAQ: AAPL) iPhone is starting to trend lower while at the same time demand for Samsung's flagship Galaxy S9 is poor.
KeyBanc Capital Markets' John Vinh and Michael Lin.
Carrier surveys across both North America and Western Europe found iPhone sell-through trends in April were mostly in-line with expectations during the seasonally slower selling period, the analysts said in a research report.
Here is a summary of some of the notable findings relating to the iPhone:
- iPhone demand was "muted" from buy-one-get-one free promotions.
- Carrier promotions at the beginning of the iPhone cycle likely pulled forward demand.
- Sales of iPhone 8 and 8-Plus continues to outpace the iPhone X.
- Overall iPhone inventories moved to an "encouraging" level of around five DOI (days-of-inventory).
- Carriers kept their iPhone promotions unchanged in April.
Here is a summary of some of the notable findings relating to the Galaxy S9:
- The higher price point for the GS9 resulted in "extremely disappointing" sales.
- Contacts cited a lack of incremental features in poor GS9 sales.
- Samsung saw a "limited benefit" from promotional activity.
- Overall, GS9 inventories remain "significantly elevated."
Stocks To Buy
The "modest" decline in iPhone inventories prompted KeyBanc's analysts to become "slightly more constructive" on owning mobile supply chain stocks into the back half of 2018 -- even though the "excessive" GS9 inventories is a concern. As such, investors should be selective in their stock pickings and the firm continues to recommend three names, including:
- Broadcom Inc (NASDAQ: AVGO): Overweight, $280 price target.
- Skyworks Solutions Inc (NASDAQ: SWKS): Overweight, $120 price target.
- Synaptics, Incorporated (NASDAQ: SYNA): Overweight, $60 price target.
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|May 2018||Bank of America||Maintains||Buy||Buy|
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