Apple (NASDAQ: AAPL) shares made gains on just about every day last week, opening Monday at $125.03 and reaching $129.62 (which was also the high for the week) by Friday's closing bell for a 3.7% gain on the week. Shares are at $131.83 as of this writing. The surge is no doubt due to a flurry of bullish reports from analysts in the days leading up to Apple's third quarter results call, which is tomorrow, Tuesday July 21 at 5:00 PM ET.
Two weeks ago, UBS Financial, Brean Capital and Canaccord Genuity all issued research notes either upping their Q3 iPhone sales estimates, target prices, or both. Last week, several more investment firms followed suit. KGI Securities analyst Ming-Chi Kuo issued a note on Saturday, estimating that Apple sold 54.2 million iPhones, 8.8 million iPads, 5.4 million Macs and 3.9 million Apple Watches in the third quarter. While this puts iPhone and Mac sales up 54 percent and 21.6 percent respectively year-over-year, the iPad had a dismal quarter, dropping 33.5 percent YOY. He believes a new iPad mini improve sales in the next quarter. He also sees a 41 percent increase in Apple Watch sales in the fourth quarter.
UBS analyst Ste Milunovich issued another note last week, saying that strong iPhone 6 Plus sales will push the average iPhone 6 price to $660, resulting in a 40.9% gross margin. That would surpass Wall Street's estimate of 39.4% and even Apple's own guidance of 38.5% - 39.5%.Analyst Daniel Ives of FBR Capital also revealed bullish estimates last week. He raised his estimated third quarter revenue to $49.2 billion and earnings per share to $1.79 from $47.8 billion and $1.72 respectively. He maintains an "outperform" rating and believes share prices will reach $185 within the next twelve months.
Outside of all the positive analysis last week, the other big news was Apple Pay's UK launch on Tuesday. Over 250,000 brick-and-mortar locations will accept the mobile payment system initially, with many more to come. Eight major banks were supposed to support Apple Pay at launch time, but HSBC and Lloyd's are currently not supporting it, though both plan to in the near future. Barclay's, which initially wasn't going to partake, announced that it would support Apple Pay.
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Back in the U.S., Apple Pay is finally making an appearance at the pump with Chevron's Apple Pay pilot program. Chevron and Texaco both accept Apple Pay, but only at the cash register inside, making it decidedly less convenient than just using a physical card at the pump. Chevron's program is currently only in the Bay Area, but should expand in the future.
What began as a lawsuit by two Apple Store employees over having their bags searched before every break period and at the end of the day, has ballooned and been certified as a class action law suit by a federal judge in California on Thursday. The plaintiffs allege that these searches, aside from being demeaning, take enough time over the course of a year to add up to a substantial amount of pay that the employees should be compensated for.