Apple’s 16e “can add $14B in iPhone sales,” Says Evercore Analyst

Evercore ISI analyst Amit Daryanani believes that Apple’s (AAPL) iPhone 16e launch could “add ~$14B in iPhone sales revenue.” The analyst noted that the surprising iPhone price hike and the introduction of the Apple C1 modem chip are both positive from a P&L (profit and loss) and technology standpoint. Following the launch, Daryanani maintained a Buy rating and $260 price target on AAPL stock, implying 6.2% upside potential from current levels. 

Daryanani is a five-star analyst, ranking 235 of the 9,389 Wall Street analysts covered by TipRanks. He boasts an impressive 14.2% average return per rating, with a 61% overall success rate on his recommendations. Notably, the analyst has consistently maintained a Buy rating on AAPL stock.

The new model was expected to be the fourth generation of the iPhone SE lineup. However, Apple discontinued the SE model and rather rebranded the new iPhone to 16e. 

Analyst’s Bullish Views on AAPL Stock  

Daryanani seems highly impressed by Apple’s tactical 16e launch along with a modem chip. Let’s learn in detail about Daryanani’s bullish views on the Apple iPhone 16e.

• Price Increase a Boon for iPhone Sales – The analyst had expected Apple to launch the iPhone 16e with a mildly increased price of $499 compared to $429 earlier. However, Apple hiked the price to $599, which he thinks will enable the company to hit iPhone sales of roughly $14 billion.
• Price Hike a Test Case for iPhone 17 – Daryanani believes that increasing the iPhone 16e’s prices higher than expected could be a test case for increasing the prices of the upcoming iPhone 17 series. The analyst is encouraged that Apple has finally increased the prices for the first time since 2017, which could be positive for the company’s financials.
• C1 Modem Chip Fortifies Tech Leadership – The analyst was also impressed with the surprise unveiling of the Apple C1 modem chip in the 16e device. The in-house modem chip is expected to considerably boost the smartphone’s battery life and improve Apple’s gross margins. Plus, he thinks the same chip could be added to the upcoming iPhone 17 models. This launch fortifies Apple’s leadership position from a technology perspective.

To sum up, Daryanani is highly encouraged by both iPhone 16e’s higher pricing and the in-house modem chip, which stand to bolster sales and margins. Furthermore, the analyst says that the upgraded hardware offering at this price point could act as a major catalyst for iPhone sales in price-sensitive markets. This could, in turn, support Apple’s dwindling sales in China.

Is Apple a Buy, Hold, or Sell?

Analysts remain divided on Apple stock owing to its declining sales in China, one of its largest markets. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 18 Buys, 11 Holds, and four Sell recommendations. Also, the average Apple stock price target of $250.95 implies 2.5% upside potential from current levels. Meanwhile, AAPL stock has gained 35.5% in the past year.

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