Verizon (NYSE:VZ), Apple (Nasdaq:AAPL) iPhone Deal Underestimated Says Credit Suisse (NYSE:CS)

Citing Credit Suisse (NYSE:CS), Canaccord reported the effect of the deal between Verizon (NYSE:VZ) and Apple (Nasdaq:AAPL) for the iPhone isn't being applied strongly enough toward Verizon.

Canaccord noted, "On Tuesday, Verizon finally got to tell the world that it was going to start selling Apple’s iPhone on February 10, with prices starting at $199 for the 16GB model, and $299 for the 32GB model. At the launch, Verizon failed to disclose the details of its data plans. On Wednesday, Credit Suisse put Verizon on a bullish short-term trading alert, because the analyst believes that the consensus estimates for the company’s 2012 earnings are “way too low”. Although, Credit Suisse has a neutral rating on the stock for the longer term, given that the analyst sees some better opportunities elsewhere. Credit Suisse highlighted that its $3.00 EPS forecast is $0.46 above the consensus forecast. Credit Suisse stated that other analysts have “not adequately incorporated the impact of the iPhone into estimates.” Verizon is hosting an analyst day on January 25, 2011, when the company could push analysts to raise forecasts. Credit Suisse believes that other analysts are underestimating the impact which the iPhone will have on Verizon’s Average Revenue Per Unit (ARPU), as smartphones provide significantly higher ARPUs than other phones. In 2010, Credit Suisse estimates that smartphone incremental ARPU was $6.50, which should rise to $12.00 in 2011 and $15.90 in 2012 – with the increase largely flowing to the bottom line. Piper Jaffray analysts believe that Verizon could sell 7-13 million iPhones this year, while Apple has sold 75.6 million iPhones cumulatively since its launch."

Verizon was trading at $35.74, gaining $0.27, or 0.78 percent, as of 1:54 PM EST.