The June quarter earnings report is now just a day away – and analysts continue to adjust their models and look ahead to what comes next.
Shares of Apple (ticker: AAPL) were up 0.4% to $149.18 in afternoon trading Monday. If the gains hold, the stock would hit a new close, eclipsing the old high of $149.15 earlier this month.
Wall Street’s consensus for the quarter is $72.9 billion in revenue and earnings of $1 per share. Apple has warned that sales could be reduced by as much as $4 billion due to component shortages, but did not provide detailed guidance for the period.
Baird analyst William Power repeats its Outperform rating and a price target of $160. He projects “strong results,” with an improvement in the ongoing work-everywhere trend and strong iPhone demand.
“Apple stocks typically perform well in the two months leading up to the next iPhone launch,” Power wrote in September. “With nearly 1 billion iPhones in use worldwide, the 5G upgrade opportunity remains significant, with current US carrier promotions providing additional tailwind. Combined with continued strength in wearables and services, along with iPad and Mac, we remain positive in the short and long term.”
Evercore ISI analyst Amit Daryanani confirms its Outperform rating and $175 target, claiming the company can weather continued supply chain headwinds. He thinks the problem will exceed $4 billion in the September quarter, “because all signs seem to indicate that the situation has worsened over the past three months.”
He adds that year-over-year comparisons are becoming more difficult, and there is “some near-term uncertainty” about the iPhone outlook for the current quarter with the announcement of new phones on the way.
Still, Daryanani likes the stock. “We remain convinced that Apple can sustainably increase revenues in the high-teens,” he writes. “In addition, the headwinds we highlight appear to be relatively priced in as Apple has underperformed the S&P 500 by about 800 basis points for the year so far.”
Credit Suisse analyst Matthew Cabral remains cautious, reiterating its neutral rating and a $150 target. He expects results slightly above consensus, both on the upside and downside. He adds that investor focus is shifting to the fall iPhone launch from mid-to-late September, and earnings are unlikely to be a major catalyst for the stock.
“Towards launch, we are optimistic that 5G momentum will continue, although we think it will be more gradual from here on out, given a more incremental series of feature updates this fall and as adoption becomes more mainstream versus pent-up demand from tech-savvy early adopters.” adopters are pushing for the iPhone 12,” he writes.
Write to Eric J. Savitz at firstname.lastname@example.org