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Wall Street arrives on Apple.
Shares of the iPhone maker climbed more than 6% on Wednesday after announcing a profit the day before, reaching $ 1 trillion in market capitalization. Apple has exceeded analysts' expectations regarding second-quarter earnings and revenue, as well as their outlook for the company's third quarter.
The results have allowed Apple bulls, especially those who believe in the company's mission to focus more on services such as iCloud and Apple Music, which grew 16% year-on-year.
Here are the reactions of four Wall Street experts in the quarter:
Gene Munster, Managing Partner at Loup Ventures, saw several things that made him bullish:
"This company is a driving force, and I want to put that in perspective, and we tend to ignore that. [earnings per share] number. They will make more money over the next five years – that's what we estimate – than all the FANGs, or call it an equal amount. So I think investors are underestimating that and it occupies an important place: earnings from GAAP. Second, I want to clarify China. This has improved. Specifically, the iPhone was the most painful point in the last quarter. We estimate that the iPhone – this is not an advertised figure – was down 40%, 4-0, in the month of December, and probably by 28% in March, which was a little extent of improvement. And the last is the meaning of the redemption. […] This redemption … is a huge deal. And just to put things in perspective, if they keep their promise – we'll listen to the call of the moment on this – to be cash neutral, if they keep that promise over the next five years, this should theoretically increase the share price by about 25%. I will not go over the details and calculations on this, but these are my top three points to remember. They are less about this quarter. If I had to add a fourth, which is important, it's probably the best game on 5G, and we'll be tired of hearing about Apple and 5G, but stay tuned for more . "
Guy Adami, director of the private group advisory and advisor in CNBC's "Fast Money" show, said the last quarter should push market watchers to reassess Apple's valuation:
"I will not pretend to be hypocritical.For me, pretending to have been a furious Apple bull – I did not do it.Most people on the desk have it, I do not have it. I did not, but one thing we said is that revenue continues to grow in services, and now they are 19.7%, Apple's valuation needs to get better, and that [is], I think, what is happening now. The question you need to ask yourself is this: this number of services goes from 20% to 25%[%], what is the good multiple for Apple? I would say it's almost a multiple market, maybe 18 times. That brings you to a stock of about $ 235. If you want to give them a discount, 16, 16.5 [times], the price is reasonable here. But I think that's the calculation you need to make to get out of these numbers now. "
The Chatham Road Partners Research Director, Colin Gillis, was not as impressed as the others:
"[Apple CEO] Tim Cook does not have the flame of his founder and he will be recognized, at least in my book, as king of redemption. He is a buyout CEO. Its realization n ° 1 made it possible to pay these 300 billion dollars to the shareholders. Well, it's quite a feat, but it also means you had no idea. You had no idea how to best deploy this money. And I think in 10 years we may be looking at this cycle, the cash flow generated by the iPhone and the lack of innovation to be able to deploy this money and regret the fact that Apple does not Has not been able to do so with new sources of income. "
Jeremy Bryan, Senior Portfolio Manager at Gradient Investments, has remained strategic:
"The thesis is still valid for us, it has increased by 30% since the beginning of the year and has reached a peak of about five years in terms of evaluation. It was just safe to withdraw a part of it.The report looks good.We think the numbers look good.We still have some of it.But I think it was always careful remove some of them. "
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