What Analysts Are Saying About Apple After Earnings
Apple Inc. (NASDAQ: AAPL) released its most recent quarterly stocks last week and shares ran to an all-time high, closing in on the coveted trillion-dollar valuation. While investors cheered on this report, most analysts were in agreement. Although there were some concerns in this earnings report, they were largely overshadowed by solid numbers and a huge share buyback plan.
Here 24/7 Wall St. has included some highlights from the earnings report, as well as what analysts are saying about Apple after the fact.
The iPhone giant said that it had $2.73 in earnings per share (EPS) on $61.1 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $2.69 in EPS on revenue of $60.98 billion. The same period of last year had EPS of $2.10 and $52.9 billion in revenue.
In this quarter, the firm reported its product sales as follows:
- iPhone moved 52.2 million units, up 3% year over year. The segment pulled in revenues of $38.0 billion, an increase of 14%.
- iPad reported 9.11 million units sold, an increase of 2%. Revenues increased 6% to $4.11 billion.
- Mac sold 4.08 million units, a decrease of 3% from last year. Revenues remained flat at $5.85 billion.
- Services revenues increased 31% to $9.19 billion.
- Other Products revenues increased 38% to $3.95 billion.
In terms of the guidance for the fiscal third quarter, the company expects to see revenues in the range of $51.5 billion to $53.5 billion and gross margin of 38.0% to 38.5%. The consensus estimates call for $2.16 in EPS on $52.04 billion in revenue.
Merrill Lynch reiterated its Buy rating and raised its price objective to $225 from $220. The firm noted that the implied iPhone units in the coming quarterly guidance were higher than investor expectations, and iPhone X was the number one selling phone in China. Also noted were that services growth of 31% was much broader than just licensing increases. Merrill Lynch also sees gross margins having tailwinds into 2019 from lower component costs, flow through of foreign exchange (currency) benefits and also an improving services mix.
BTIG reiterated its Buy rating and raised its price target to $207 from $198. The firm increased 2018 expectations to $12.55 EPS based on higher share repurchase activity and on increased revenue expectations for service revenues and from the Apple Watch.
Canaccord Genuity reiterated its Buy rating and raised its price target to $208 from $200. Just a day earlier, the firm said that it had anticipated lower iPhone average selling prices due to mix and lower unit sales due to inventory reductions.
A few other analysts weighed in on Apple as well:
- Atlantic Securities reiterated a Neutral rating with a $185 price target.
- Barclays maintained its Equal Weight rating and raised its target to $161 from $157.
- BMO Capital Markets maintained its Market Perform rating and raised its target to $171 from $166.
- CFRA (S&P) reiterated its Buy rating and $195 price target.
- Deutsche Bank maintained a Hold rating with a $165 price target.
- FBN Securities maintained the stock at Outperform but lowered its target from $210 to $200.
- HSBC reiterated its Buy rating and has a $205 target price.
- Loop Capital reiterated its Buy rating and $195 target price.
- Piper Jaffray has an Overweight rating with a $214 price target.
- Goldman Sacks has a Neutral rating with a $164 price target.
Shares of Apple closed Friday at $183.83, with a consensus analyst price target of $194.49 and a 52-week range of $142.20 to $184.25.