U.K. Equipment Maker Jumps on Speculated Apple IPhone Connection
(Bloomberg) -- Renishaw Plc, a British supplier of precision measuring and calibration equipment, jumped on Friday after an analyst predicted the company would benefit from Apple Inc.’s anticipated iPhone 8 launch.
A spate of “peculiar” data points have emerged in the Chinese machine-tooling market, which usually signals that Apple is ordering equipment for a pending launch, Redburn’s Stephen Swanton wrote in a note to clients.
Japanese machine-tool orders jumped 28 percent in March, much of which is attributable to demand from China, he said. While Chinese industrial growth has been improving, “the scale of ordering of machine tools in China goes far beyond cyclical recovery.”
Swanton highlighted that Renishaw has never explicitly said Apple uses its equipment, but during an earlier iPhone promotional video, a Renishaw probe was shown as the phone’s casing was machined. Earnings upgrades of 10 percent to 30 percent are possible for the Gloucestershire, U.K.-based company, Swanton added.
A spokesman for Renishaw was unavailable for comment when contacted. The company’s shares closed up 5.6 percent to 3,415 pence in London, the most since July 27.
The iPhone 8 is expected to launch by September, 10 years after the original iPhone. The phone is rumored to feature an edge-to-edge display and glass body.
“The iPhone is now made to a level of precision not far away from that at which Rolls-Royce operates with aero engine fan-blade manufacturing,” Swanton said.