Apple Hedge Fund Expectations Boosted By Evidence Of China iPhone Distribution Deal

Dec. 3.13 | About: Apple Inc. (AAPL)

Monday night marked the first time an Apple (NASDAQ:AAPL) deal was in place to distribute the iPhone 5S and iPhone 5C in China. A subsidiary of China Mobile Limited (NYSE:CHL) in Suzhou opened the doors for pre-orders last night.

A deal to bring the iPhone to China could result in a large boost to Apple’s stock. China Mobile boasts over 700 million subscribers which could translate to a big increase in iPhone sales.

After beating analyst expectations for the fourth fiscal financial quarter of 2013, the bar has been set high again for the Holiday season, which is typically the best time of the year for Apple’s sales. Apple is expected to report its FQ1 2014 earnings on January 22. The current Wall Street consensus is for Apple to report $14.05 EPS and and $57.142B in revenue. Our consensus from 52 Buy Side and Independent contributing analysts is for Apple to report $14.45 EPS and $57.445B in revenue.

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As more information about the iPhone’s launch in China becomes available we predict the earnings expectations for Apple to rise even higher going into the report date, which could mean a rise in stock price as well. While the Wall Street consensus has decreased in the past month from $14.08 to $14.05, our consensus has increased from $14.40 to $14.45 reflecting higher expectations from holiday sales.

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Strong recent iPhone numbers in the U.S. and the possibility of a widespread launch in China have re-energized Apple’s stock and the future looks promising.