Wall Street positive on Apple's Q4 earnings, bullish on iPhone 7 holiday sales
Though immediate investor reaction saw share prices drop following the results of Apple's September quarter, analysts on Wall Street are thinking longer term and remain bullish about AAPL stock.
Apple earned $46.9 billion in revenue in its fourth fiscal quarter of 2016, coming in just slightly ahead of consensus estimates with $1.67 earnings per share. Analysts on Wall Street generally gave the results a warm reaction, and highlights of their thoughts as compiled by AppleInsider follow.
Accordingly, he has raised his price target on shares of the company to $155.
In Munster's estimates, iPhone growth will remain steady in the 5 to 13 percent range over the next 7 quarters.
Munster noted that shares of AAPL slid about 3 percent in aftermarket trading on Tuesday, after Apple reported its results. The immediate selloff came as a result of a pre-earnings increase in investor expectations regarding guidance for Apple's current December quarter.
To Munster, that outlook is misguided, and Apple's September quarter results and December quarter guidance indicate that the company's "franchise appears intact."
Piper Jaffray has maintained its "overweight" rating for shares of AAPL.
In his view, there is no replacement product for the iPhone other than another iPhone. He believes the anticipated 2017 iPhone refresh, reflecting the handset's 10th anniversary, could prove to be a "powder keg" for sales.
"We would be buyers with a $135 target that could easily be ~$145-$150 based on a scenario with current comparable multiples and AAPL's historic discount to such peers," Arcuri wrote.
In addition to a $135 target, his company has also maintained an "outperform" rating.
He believes App Store revenues were around $7.8 billion last quarter and $28 billion for the fiscal year. That would make the App Store 22 percent larger than Mac sales for the year and 35 percent larger than iPad sales.
Macquarie estimates that Apple's total services business accounted for 27 percent of gross margin in the quarter and 21 percent for Apple's fiscal year 2016. He believes investors should focus more on the new revenue opportunities tapped into by the company.
The iPhone business, of course, takes center stage, and Schachter also noted that Apple's guidance implies a return to iPhone growth in the current December quarter, despite continued supply issues.
Macquarie Research has reaffirmed its "outperform" rating for shares of AAPL, with a 12-month price target of $133.
In all, Daryanani believes Apple is off to a "solid start" for the iPhone 7 product cycle. He believes the current flagship iPhone lineup will see stable sales over the next year.
RBC has maintained an "outperform" rating for Apple stock, with a price target of $125.
Apple earned $46.9 billion in revenue in its fourth fiscal quarter of 2016, coming in just slightly ahead of consensus estimates with $1.67 earnings per share. Analysts on Wall Street generally gave the results a warm reaction, and highlights of their thoughts as compiled by AppleInsider follow.
Wall Street analysts remain bullish on Apple heading into the fall and throughout 2017.
Piper Jaffray
Analyst Gene Munster sees Apple staying in mid-to-high single-digit growth for at least the next two years, riding the strength of the current iPhone 7 lineup and the anticipated 2017 handset redesign.Accordingly, he has raised his price target on shares of the company to $155.
In Munster's estimates, iPhone growth will remain steady in the 5 to 13 percent range over the next 7 quarters.
Munster noted that shares of AAPL slid about 3 percent in aftermarket trading on Tuesday, after Apple reported its results. The immediate selloff came as a result of a pre-earnings increase in investor expectations regarding guidance for Apple's current December quarter.
To Munster, that outlook is misguided, and Apple's September quarter results and December quarter guidance indicate that the company's "franchise appears intact."
Piper Jaffray has maintained its "overweight" rating for shares of AAPL.
Cowen and Company
Analyst Timothy Arcuri believes Apple is doing a great job "threading the needle" by meeting investor expectations while also maintaining tight controls on supply. He believes the company is looking to avoid inventory issues it saw with the iPhone 6s series.In his view, there is no replacement product for the iPhone other than another iPhone. He believes the anticipated 2017 iPhone refresh, reflecting the handset's 10th anniversary, could prove to be a "powder keg" for sales.
"We would be buyers with a $135 target that could easily be ~$145-$150 based on a scenario with current comparable multiples and AAPL's historic discount to such peers," Arcuri wrote.
In addition to a $135 target, his company has also maintained an "outperform" rating.
Macquarie Research
Of particular interest to analyst Ben Schachter were Apple's services business, which saw a 24 percent increase, and its App Store revenues, which were up 43 percent year over year.He believes App Store revenues were around $7.8 billion last quarter and $28 billion for the fiscal year. That would make the App Store 22 percent larger than Mac sales for the year and 35 percent larger than iPad sales.
Macquarie estimates that Apple's total services business accounted for 27 percent of gross margin in the quarter and 21 percent for Apple's fiscal year 2016. He believes investors should focus more on the new revenue opportunities tapped into by the company.
The iPhone business, of course, takes center stage, and Schachter also noted that Apple's guidance implies a return to iPhone growth in the current December quarter, despite continued supply issues.
Macquarie Research has reaffirmed its "outperform" rating for shares of AAPL, with a 12-month price target of $133.
RBC Capital Markets
Any sell-off of Apple stock should be seen as a buying opportunity for investors, analyst Amit Daryanani believes. He sees Apple on a path to $10 earnings per share by fiscal year 2018.In all, Daryanani believes Apple is off to a "solid start" for the iPhone 7 product cycle. He believes the current flagship iPhone lineup will see stable sales over the next year.
RBC has maintained an "outperform" rating for Apple stock, with a price target of $125.
Comments
That gave me a good laugh.
I've got a lot of money locked up in AAPL and I'd like the price to catch up to the earnings. Getting rid of Cook might do that, but not in the way you have in mind.
I have to agree, Wall Street has killed off more companies who's CEO are too worried about what Wall Street thinks verse doing the right thing for the company, its customers or employees. I have worked for enough companies and saw internally all the gyrations a company goes through to meet some stupid Wall Street metric they measure a company on QoQ. If Apple listen to wall street they too would be in the race to the bottom and have little to no profits and would be in the same boat of Samsung pushing crap out before it is ready
Steve Job use to tell the analysis to F themselves in his own way, and Cook does a little more pandering to Wall Street Analysis, but also tell them to get lose. Because of this Wall street whips them like a pig and profits on the way up and down. This is nothing new, I made a fortune on Apple back in the day when it would swing 20% to 30% on earning and product announcements. It was so predicable and like clock work. today the small swings are not worth the effort to do the trades. However, Apple will continue to run up this year and they will kill in in December and through the first half of next year. Sell in Dec and buy back in Q2, or buy right before the dividend day and sell and buy back again.
This morning I found out I wasn't alone, as Jim Cramer became so agitated on CNBC this morning I thought he was going to explode -http://video.cnbc.com/gallery/?video=3000562654
Apple remains a key pillar in my personal investments, and I think that Tim and his team continue to do a stellar job. The iPhone 7 really is the best iPhone I have ever owned (and I have had most of them). I'm looking forward to upgrading my 2009 iMac soon (and will be watching the new products debut tomorrow morning). I use Apple products both personally and in my business and I can confirm that they synergistically provide me with great personal and economic value.
The analysts today are "wacked", they denigrate Apple but praise Tesla (which I am shorting by the way). Their prognostications and market sway are, IMHO, causing mis-allocation of capital in the US markets, as their comments drive investments to companies that don't make economic sense. This robs healthy economic drivers of much needed capital, and wastes capital on high flying mythical unicorns, many of which ultimately crash back to earth.
Investment is about fundamentals, and Apple has a good fundamental business model that is easy to understand (delivering state of the art products and services that are highly valued and respected by customers). The company provides a nice dividend and sits atop the worlds single largest hoard of cash - available in case of downturns and for strategic acquisitions. Simple, extremely profitable, with great products and services - that is a company model that makes sense to me and one in which I will invest.
The P/E of AAPL hasn't really changed much in the post-Jobs era (see image). It's been flat since the end of 2011. You could even say that under Jobs it was crashing from 2005 to 2011. It's been undervalued for many years, and many people try to explain it (no real answer). Overall, I'm happy with the report. I'm a big investor in AAPL. Yes, it has it's ups and downs, but long term it has been amazing. Combine that with the 10% yearly increase in dividends and it is becoming a really nice stock. YTD the AAPL stock has gained 9%. In the past 5 years it's 103%, and in the past 10 it's 900%.
I personally can't complain about the numbers, and am looking forward to the next dividend payment on Nov 10.
The market still treats Apple unfairly to this day.
So did investors trust Jobs? Apparently not according to your logic because AAPL is at an all-time high long after Jobs died. Stop making emotional arguments on behalf of investors and using words like "trust". You sound silly.
The car? That seems to be done. The watch? Seems like a nice little hobby more than an engine of exponential growth.
So any realistic foreseeable growth is coming on the back of the next iPhone, in a world where smart phones are reaching market saturation.
It's a formula for robust profits and continued profitability for Apple, sure thing -- but growth? Not so much.
And without that obvious potential for exponential growth, there is no investor greed, and without that greed, there is no share price growth.
So yeah... the best tech company in the world is a value play.
Apple is well-run. Great work, Apple. But maybe there is a deficit of vision there... idk.
microsoft has changed in a big way
microsoft is making their own products
microsofts products will make the company more money at that new price point
surface is selling more each iteration
pad sales were down
mac sales were down
iphone sales were down
until you can give us minutes from that last board meeting at apple where cook was saying no to everything and frustrating all the other heads at apple, please stop pretending to do so.
Perhaps getting rid of Balmer helped. New vision certainly has. But Wall Street has been a popularity game for years- statistics and prediction is not as valuable as it used to be.