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Fubon Research Upgraded This Apple Supplier Because Of The iPhone

Fubon Research, a firm's coverage that is distributed through Jefferies for companies traded in Taiwan, on Monday issued a company snapshot of Foxconn Technology Co Ltd, which is publicly traded in Taiwan, as the company issued better than expected gross margin due to strong demand for high-end metal casing for the Apple Inc. (NASDAQ: AAPL) iPhone 6/6 Plus. Foxconn was upgraded from Neutral to Add with a $95 price target.

Fubon Research analyst Ange Wu wrote, "We think increasing demand for the iPhone series will continue to be FTC'S main profit driver this year...metal casing demand will continue to grow organically in FY15~16, especially for high-end smartphones like the iPhone series. FTC, Catcher, and Casetek remain the tier-1 players in Apple's metal casing supply chain, based on the manufacturing capability approved for the iPhone and iPad. Foxconn should be able to retain its leading position in metal casings, as Apple will need to rely on its qualified manufacturing capability in upcoming quarters."

Foxconn's high-quality products have consistently qualified itself to produce Apple's newest devices. Its improving gross margin can also be attributed to product diversification, such as thermal sinks and automotive applications, to offset a decline in the game console business. Analysts believe that the experience gained from iPhone rear metal casings will sustain Foxconn's position as the main supplier for the next iPhone.

Latest Ratings for AAPL

Mar 2015

Credit Suisse

Maintains

Outperform

Outperform

Mar 2015

Cantor Fitzgerald

Maintains

Buy

Mar 2015

Cowen & Company

Maintains

Outperform

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

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© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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