Be prepared, the iPhone 5 will be the single biggest launch of a product in the history of consumer electronics. According to BGR, the world needs to prepare themselves for the single biggest ever launch of a product in the history of consumer electronics. The news comes after Wells Fargo resumed their coverage on Apple shares with an Outperform rating and a valuation range of $640 to $660 on Wednesday afternoon.
iPhone 5 to be biggest product launch in consumer electronics history (BGR)
The firm went on to say that the new iPhone 5 launches along with the earnings resulting upside driven by the demand for the phones have according to history been the biggest share catalyst for Apple. The stock looks undervalued trading at 10.5x reports Wells Fargo.
Wells Fargo are reporting FY12 and FY13 EPS of $46.55 and $54.27 respectively with the new targets being based on P/E multiple of 12x the estimate of FY2013. They see an upside potential to the FQ3 2012 consensus with an EPS of $10.19 and an estimation of $10.84. For the fourth quarter they see a consensus EPS of $10.33, which is aggressive and there is a target of $9.53. Any potential weaknesses on these results are expected to be short lived.
Speaking from an iTV, the Apple TV set, they went on to say that it would be CY2013 at the earliest. Along with the new iPhone 5 they see changes to the iPad Mini, iMac, Mac Pro and iPods. It is thought that the MacBook Pro will help when it comes to driving units and revenue with modest offsets on the gross margins. It is thought that other catalysts could go towards raising dividends in late 2013.
A potential accounting lever in the form of warranty over accruals could help to support gross margins, should it be reversed. They also estimate that over accrual may be around $1.1 billion or 290 basis points in gross margin, or $0.86 in EPS.
