UBS notes the first three parts of their series argued that (1) a 13-15x P/E multiple is reasonable given what they know today, (2) further expansion toward a Nike (NKE) multiple is possible if there is growth beyond the iPhone 8 cycle, and (3) the iPhone 8 ASP likely is being underestimated by analysts. Here firm concludes that the consensus F18 gross margin estimate of 38.2% may be too low. They calculate that a 39-40% margin is reasonable if firm's iPhone unit growth of 15% and ASP of $730 assumptions are correct. Potential for a declining gross margin seems a constant worry for Apple investors. The iPhone appears vulnerable to either an attack from lower cost competitors or a constantly rising build of materials not offset by price increases. In recent years, however, Apple typically comes in at the high end of its gross margin guidance. Firm expects the iPhone 8 contribution margin to decline due to a higher BoM; Buy, $170 tgt