Apple is widely expected to have a rough quarter, but according to a forecast from Drexel Hamilton’s Brian White, it may have just posted its best January since 2008.
White derives his estimates from Apple’s suppliers, and he was one of the first analysts to warn about an iPhone sales downturn last fall. During the most recent earnings report, Apple advised that iPhone sales would fall during the January quarter for the first time in history.
“All of the companies in our Apple Monitor (i.e., basket of Apple suppliers in Taiwan) have reported January sales and the performance was much better than typical seasonality,” White writes. “After the weakest December on record for our Apple Monitor, this was the best January since 2008. Given the significant underperformance for our Apple Monitor in November and December, we are pleased to see this strong outperformance in January.”
This suggests that Apple is preparing to firmly beat its own conservative sales projections during 2016 and is preparing to sell significantly more iPhones and other products than Wall Street is projecting.
Traditionally, Apple’s January quarter is its weakest, especially compared to the holiday quarter. But White’s supply chain sources indicate that Apple’s January purchases came in flat, whereas they typically decline about 11%.
Even Apple’s main manufacturers, Foxconn Hon Hai and Pegatron, beat expectations.
White also notes that his supply chain sources suggest that Apple has started producing a 4-inch iPhone, and is expected to be launched in March.
Apple is currently trading at around $94 a share but White has set an aggressive price target of $200, calling the stock “one of the best values in the tech world.”
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