Does the iPhone Business Make AAPL a Trading Stock or Bond Coupon?

We think it's a bit of both... Smartphones are a mature market and lack of revolutionary innovation and mispricing have led to well publicized iPhone challenges... With the iPhone installed base at 900M units and oldest devices approaching 5 years, we believe annual iPhone shipments are running near replacement demand (900M / 5yrs = 180M) - potentially a supportive LT annuity for device sales... We model iPhone units down 15% Y/Y in CY19 to 175M units, but a C1H19 run-rate of 75M units implies an improved C2H trajectory and therefore the stock could be a good buy from a short-term trading standpoint as well... Stock buybacks can help support the stock near term, in our view..."

Read more about this call here.

"It seems likely to us that Boeing will compensate operators for their grounded aircraft and this can take many forms, including both near-term cash and future purchase economics... As a floor, if 737 MAX rent is ~$300k per month and there are ~375 in service, the monthly impact would be ~$115 mn; however, airlines will likely seek compensation for the cost of alternative lift, other operating costs, and lost profits, so the final number could be a multiple of this amount.."

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