CNBC Stock Blog

You Want to Own Apple Stock: Pro

A customer buys new Apple Inc. iPhone 5 devices at a store in San Francisco, California, U.S.
David Paul Morris | Bloomberg | Getty Images

Apple sold out of its latest iPhone as more than flew off the shelves in the three days following their in-store debut, causing one analyst to reduce his shipment estimates for the smartphone.

“We’re taking a bit of a conservative tact here,” said Steven Milunovich, a technology strategist at UBS. “It’s very much a supply issue. It’s not a demand issue, and we continue to think the stock should rise over the next 12 months.”

Milunovich recently cut his estimate for shipments during the crucial December quarter to 38 million from 44 million.

Although Milunovich is forecasting iPhone 5 supply constraints in the near term, he has a “buy” rating on the company’s shares and a $780 price target.

“We think overtime that the Apple hegemony is going to continue to increase, and you do want to own the stock,” he said.

Apple Slipping?

But if future phone shipments experience further delays, there is some risk that consumers may choose not to wait and instead purchase competitors’ phones.

“Our survey certainly suggests that there are a lot of people who want it, and there are probably more Android users moving to Apple than vice versa,” Milunovich said.

A future deal with China Mobile, which has around 600 million subscribers, could help Apple “dramatically,” but may not occur until late 2013 or possibly even 2014, Milunovich said.

“That becomes important for the stock as you get into next year. You get those first big two quarters of iPhone 5 shipments, and then it starts to level off and people are like what’s next?” he said.

—By's Katie Little; Follow Her on Twitter @katie_little

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Within the past 12 months, UBS Securities has received compensation from this company/entity: Dell, Hewlett-Packard, Apple.