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A customer service representative works with Apple Store customers as shoppers return to indoor shopping after Los Angeles County eases restrictions at places like the Beverly Center in Beverly Hills on October 8, 2020 .
Genaro Molina | Los Angeles Times | Getty Images
Apple is expected to release its first quarter FY2021 results next week, and analysts’ expectations are optimistic.
The company failed to get investors excited during its fourth quarter, which ended on September 26, due to weak iPhone sales. But the weakness was likely due to people waiting for the new iPhone 12, which didn’t go on sale until October.
Wednesday’s earnings report will mark the first full season since Apple released its new line of iPhones and subscription service plans.
The company’s shares were trading above $ 136 a share, up more than 3% Thursday morning amid broader market gains.
Here’s what analysts are saying about the tech giant:
Morgan stanley
Morgan Stanley analysts said in a note Thursday that they expected a record quarter in December.
“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 report revenue and record quarterly profits, “analysts wrote, raising their price target to $ 152. from 144. “In our opinion, the iPhone 12 has been Apple’s most successful product launch in the past 5 years.”
The company highlighted the strength of Apple’s product and service portfolio, driven by the adoption of 5G, continuous distance working and learning, and the sustained engagement of the App Store. Analysts added that they were forecasting double-digit annual growth for Apple’s five revenue segments in the December quarter.
“Overall, our revenue of $ 108.2 billion for the December quarter is 5% above consensus (we are ahead of consensus in all segments except services), while our EPS of $ 1.50 is 7% above consensus, ”they said. “We expect demand to hold steady and our estimates for FY21 revenue and earnings per share are both 5% above consensus.”
DA Davidson
The firm said Thursday the stock “looks delicious” and put its price target of $ 133 under review.
As we stated previously, we believe that Apple’s first line of smartphones on 5G networks is better positioned than investors fully appreciate for the following reasons: 1) carrier support, 2) favorable discretionary income, and 3) 1B working remotely and 1B remotely learning.In addition, we attribute the recent strength in stocks to investors who have warmed up to this notion, ”wrote DA Davidson analyst Tom Forte.
The company said it would pay attention to iPhone sales trends, privacy and advertising comments, and the potential implications of the new Biden administration.
“We expect sales to increase 15.7% to $ 106,236 million, which is higher than the consensus forecast of $ 102,563 million,” the company said. “Note, Apple has not given any formal indications, but it expected double-digit growth for all product categories expected iPhone, which it forecasts single-digit growth. On profitability, we estimate $ 33,525M EBITDA (for a margin of 31.6%), which is higher than the consensus figure of $ 31,763M. Finally, we are projecting GAAP EPS of $ 1.52, against a consensus estimate of $ 1.40. “
AB orange
The company expects Apple to post strong iPhone sales, but said there were no surprises due to a likely strong iPhone 12 cycle. Analysts including Toni Sacconaghi, raised their estimates for Q1 EPS to $ 1.53 and FY21 EPS to $ 4.26 due to higher average iPhone selling prices, a weak US dollar and strength of Mac / iPad sales.
“While our estimates are above consensus, we believe our numbers are relatively in line with buyers’ expectations,” analysts said. “We expect Apple to provide ‘guidelines’ rather than ‘advice’ for the second quarter, but we are above consensus, possibly due to the currency, and our expectations for slightly seasonality. stronger than normal due to the iPhone 12 rollout schedule. “
The company said it would pay attention to Apple’s comments on potential smartphone share gains, ongoing regulatory concerns and adoption of Apple’s new services and advertising, but said Apple needed something bigger to surpass expectations.
“AAPL has had a great run and trades online with the big tech companies with higher growth rates. With 33x 21 consensus EPS and higher buyside expectations than the street, we are having a hard time seeing a case for hardware outperformance in AAPL, in the absence of a surprise product announcement, or migration to a hardware-delivered subscription model, ”they wrote.
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