If You Believe Sell-Side iPhone 8 Scenarios, Apple Is Headed For An Earnings Beat

Amid the speculation surrounding the newest iPhone features, timing, pricing and possible supply constraints, analysts at UBS believe its best to wait until Apple Inc. (NASDAQ: AAPL) actually makes the announcement.

According to UBS analyst Steven Milunovich, most scenarios have Apple exceeding F2018 consensus EPS estimates of $10.50, with upside potential towards $12 if OLED demand is strong and the average selling price reaches north of $700.

“Timing affects quarterly results, but for the full year, demand and mix are most important," Milunovich said in a recent note.

UBS expects the OLED iPhone ships in November at $900 for the 64GB models and $1,000 for 256GB. The firm expects double-digit unit growth in F2018 and single-digit growth in F2019 driven by a growing installed base and the high retention rate that Apple generally possesses.

“We expect a bulge of F15 iPhone 6 owners to upgrade in F18, creating a strong year if not a supercycle,” he added.

Augmented reality is an area where UBS believes Apple can continue to drive long-term revenue growth and “leapfrog competition in offering a superior user experience.”

UBS maintained a Buy rating on Apple with a $170 price target.

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