Analyst: September iPhone Launch Will Be Apple’s Salvation

apples-660-average-selling-price-for-an-iphone-blows-out-the-nearest-competitorWill the upcoming launch of Apple’s (NASDAQ:AAPL) next-generation of iPhone give its stock a much-needed boost after losing over 27 percent of its value this year? Pacific Crest Securities analyst Andy Hargreaves expects the new iPhone to launch on September 20 and he believes it will buoy Apple’s falling stock price.

“We expect the coming iPhone refresh to drive total iPhone unit volume that exceeds many investors’ current expectations. IPad unit growth may slow dramatically, but the combination of solid iPhone unit volume and stable or improving gross margins exiting the year could improve investor sentiment around AAPL,” wrote Hargreaves in a research note via Investor’s Business Daily.

Besides expecting a “late-September launch of an iPhone 5S and a redesigned iPhone 5,” Hargreaves also predicts that a new 9.7-inch iPad will debut at the same time. The analyst believes that a new iPad mini with a Retina display will launch sometime in November.

Despite a decreased demand for iPads, Hargreaves thinks that the iPhone will be Apple’s salvation. He expects Apple to capture about 10 percent of the replacement market for smartphones that use Google’s (NASDAQ:GOOG) Android platform.

Pacific Crest has a 12-month estimated fair value range of $430 to $520 on Apple stock. Hargreaves believes Apple will hit the upper end of this range if his iPhone expectations are fulfilled.

Although Hargreaves believes there is a “relatively healthy” demand for Apple’s iPhone, he revised his earnings estimates down slightly based on expectations for decreased iPad sales. The analyst lowered his 2013 earnings estimate from $39.40 to $38.69. However, Hargreaves also revised his 2014 earnings estimate upwards, from $40.54 to 40.99. Analyst consensus estimates currently stand at $39.51 for 2013 and $43.63 for 2014.

Apple shares closed up 0.70 percent, or $2.75, at $396.53 on Friday. Here’s how Apple has traded over the past week.

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