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Apple stock is a hair’s breadth below its historic closing high of $ 136.69, reached on December 28, 2020.
Justin Sullivan / Getty Images
Apple
stocks soar as investors cram tech mega-cap stocks ahead of the next wave of December quarter earnings reports. Apple will release its results next Wednesday, January 27, and Street’s expectations are growing more optimistic by the day, leaving stocks a few points below their all-time highs.
Morgan Stanley analyst Katy Huberty on Thursday reiterated her overweight rating on Apple stock and raised her price target to $ 152 from $ 144. She writes that her audits reveal that Apple saw the strength of its product and service portfolio in the quarter, thanks to the adoption of the iPhone 5G, the trend of work and home learning and to a sustained engagement with the App Store.
“We’re buyers ahead of what we expect to be a record December quarter impression,” Huberty writes in a research note. “Our recent conversations suggest that investors expect Apple to report strong, but not great, results for the December quarter. We disagree and believe Apple is likely to post record quarterly revenue and profit. “
Huberty expects double-digit revenue growth across all revenue segments, with “upside biased risks” for iPhones, Macs and services. Its revenue estimate for the quarter is $ 108.2 billion, well above the consensus at $ 102.6 billion. She sees earnings for the December quarter of $ 1.50 a share, above the street at $ 1.40. (Note that the company did not provide any guidance for this quarter, citing the uncertainty associated with the pandemic.)
“We expect demand to continue and that our 2021 revenue and earnings per share estimates are both 5% above consensus,” she wrote. “Given that the positioning in the quarter is moderate after the high quality stocks have rotated over the past few months, we expect strong follow-up after results.”
Huberty believes the iPhone 12 has been Apple’s most successful product launch in the past five years. It expects 78 million iPhones to ship in the quarter at an average selling price of $ 825, driving revenue growth of 14% to $ 63.9 billion, double the growth rate that the Street consensus predicts. currently for iPhone revenue. And she expects the iPhones’ momentum to continue through 2021. She notes that Apple’s Taiwanese supply chain partners have enjoyed three consecutive months of accelerating sales growth for Apple. year over year, which she says points to strong iPhone sales in the coming quarters.
DA Davidson analyst Tom Forte also reiterated his buy rating on the stock, noting that the stock looks “delicious,” despite surpassing its price target of $ 133. (He says his target is “under review” pending next week’s earnings report.) Forte also has above-consensus estimates for the quarter – he sees $ 106.2 billion in sales, with profits of $ 1.52 per share. “We believe that Apple’s first line of smartphones on 5G networks is better positioned than investors fully appreciate,” he wrote in a research note.
Monness Crespi Hardt analyst Brian White is also repeating his buy note, while maintaining his price target of $ 144. White’s estimates call for $ 105.3 billion in sales and earnings of $ 1.47 per share. “The strength and linearity of this economic recovery remains a wild card; However, we believe that Apple’s strong balance sheet, its iconic brand, its rapidly growing services business, its portfolio of innovations and its strong stance on privacy will allow the company to emerge stronger from this crisis ” , he writes.
Apple shares are up 3.1%, to $ 136.10, in recent trading. The stock rose more than 6% in the first two days of the Biden administration, increasing its market cap by $ 133 billion in that short period. The stock is a hair below its historic closing high of $ 136.69, reached on December 28, 2020, as well as its record intraday high of $ 138.79, which it hit on December 29. Apple shares have a market valuation of $ 2.278 trillion, and Apple remains the most valuable company in the world.
Write to Eric J. Savitz at [email protected]
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