Why Analysts Are Chasing Apple Even Higher

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Apple Inc. (NASDAQ: AAPL) reported its fiscal fourth-quarter financial results after the markets closed on Thursday. This stock does not seem like it can be stopped on its race higher, and analysts are cheering it the whole way. A couple of analysts were on the sidelines for this quarter and how the next generation of iPhone would be received, but ultimately their faith was rewarded and Apple stock again hit an all-time high.

24/7 Wall St. has included some brief highlights from the earnings report, as well as what some analysts are saying after the fact.

Apple posted $2.07 in earnings per share (EPS) on $52.6 billion in revenue, versus consensus estimates from Thomson Reuters for $1.87 per share and $50.79 billion. In the same period of last year, the iPhone maker said it had EPS of $1.50 and $46.85 billion in revenue.

The company reported individual segments as follows:

  • iPhone shipped 46.68 million units for $28.85 billion in revenue, up 2% year over year.
  • iPad shipped 10.33 million units for $4.83 billion in revenue, up 14%.
  • Mac shipped 5.39 million units for $7.17 billion in revenue, up 25%.
  • Services revenues grew 34% year over year to $8.50 billion.
  • Other Products revenues grew 36% to $3.23 billion.

In terms of the guidance for the fiscal first quarter, Apple expects to see revenues in the range of $84 billion to $87 billion, with a gross margin in the range of 38.0% to 38.5%. The consensus estimates are $3.77 in EPS and $85.31 billion in revenue for the current quarter.

Canaccord Genuity’s Michael Walkley believes that Apple will continue growing its leading market share of the premium-tier smartphone market with double-digit growth of its installed base during the quarter, and also that the iPhone installed base will surpass 635 million by the end of 2017. The firm raised its price target to $195 based on an expected stronger upgrade cycle in 2018 and a high average selling price for the iPhone X.

A few other analysts weighed in on Apple after earnings were released:

  • Barclays raised its price target from $161 to $162.
  • Bernstein has an Outperform rating and raised the target to $195 from $175.
  • BMO raised its price target to $195 from $180.
  • Citigroup raised its price target to $200 from $170.
  • Deutsche Bank raised the price target from $140 to $152.
  • Independent Research has a Buy rating and raised its target to $200 from $185.
  • Morgan Stanley raised the price target from $199 to $200.
  • Raymond James raised its price target to $185 from $180.
  • RBC raised its price target to $190 from $180.
  • Rosenblatt upgraded to a Buy rating from Neutral and raised its target to $180.

Shares of Apple closed Friday up 2.6% at $172.50, with a consensus analyst price target of $181.64 and a 52-week trading range of $104.08 to $174.26.