Goldman Sachs Rod Hall admits defeat, hikes Apple target to $130

Posted:
in AAPL Investors
After a year of sub-$100 predictions for Apple stock, Goldman Sachs' Rod Hall has upped his 12-month price target to $130 from $83 after Apple posted another profound earnings beat for the second quarter.

Credit: Andrew O'Hara, AppleInsider
Credit: Andrew O'Hara, AppleInsider


In a note to investors seen by AppleInsider, lead analyst Rod Hall changed its rating for Apple from Sell to Neutral after the Cupertino tech giant reported earnings that materially beat expectations in all segments. He points out that the iPhone 12 lineup did better than he expected, and also touted the performance of the Mac and iPad segments.

"Our original view that the iPhone cycle would disappoint in the midst of COVID was clearly wrong," Hall wrote. "Not only has Apple done better than we expected on iPhone during the cycle but Mac and iPad have also materially outperformed our forecasts."

Hall maintains that he meant what he said in prior forecasts, pointing out in September that Apple more often missed consensus than not between 2015 and 2019. However, Apple substantially beat expectations both in Q1 2021 and Q2 2021.

Although the coronavirus pandemic has given Apple tailwinds, the analyst admits that "Apple has executed extremely well in a tough environment." To change his view about Apple's future performance, Hall said he'd like to see sustainable demand through 2022.

Apple did not provide specific revenue guidance for the June quarter but said it does expect strong double-digit growth. Hall says Apple's expectations are ahead of consensus, despite the company saying it predicts a greater than usual seasonal revenue decline.

The analyst believes normal seasonal decline clocks in at about 15% to 15%, and says that the June quarter may see a 19% decline. He expects Apple to report revenue of $72.5 billion in the June quarter.

Hall has raised his 12-month AAPL price target to $130, up from $83. The new target is based on a 27x multiple applied to his earnings-per-share forecast. That's closer to consensus than in previous research notes, and Hall says it's because of Apple's solid performance.
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Comments

  • Reply 1 of 22
    MacProMacPro Posts: 19,254member
    "Hall has raised his 12-month AAPL price target to $130, up from $83."
    ROFL.
    Beatswatto_cobra
  • Reply 2 of 22
    And people pay this guy for financial advise? FFS
    edited April 29 peterhartronnviclauyycequality72521Beatswatto_cobra
  • Reply 3 of 22
    peterhartpeterhart Posts: 122member
    How is being an analyst a reputable “job?” It’s all a gamble, it’s all prediction…just like the weather. The fact that a handful of analysts can affect the outcome of a company’s growth or failure is amazing and also ridiculous IMO. ¯\_(ツ)_/¯ 
    macbootxBeatswatto_cobra
  • Reply 4 of 22
    How do investors trust their billions to a guy like this? I am an idiot when it comes to finance and investing but common sense and keeping up with current events told me Apple was doing just fine last quarter. What is this guy smoking?
    Beatswatto_cobra
  • Reply 5 of 22
    doggonedoggone Posts: 276member
    If I ever took the advice of these types of analysts, I would be considerably poor than I am now.  Point in fact, around the time that I started contributing to a 401k, I also invested into AAPL.  In those 20 years, my 401k had grown about 3 fold (300%) compared to the total contributions.  The APPL investment on the overhand has grown 67 fold (6700%).  I ignored the advice of the investment advisers and analysts when AAPL stock went into the big dips and hung in there.  The stock is now worth the same amount as my 401k using only a fraction of the capital. 
    That choice will make a big difference to my retirement plans.  Of course if I see signs that Apple are beginning to lose their way then I will cash out.  But given the current performance and the promise of their new offerings I am very confident that Apple will continue to overachieve in the near future.
    It always annoys me but I should not be surprised that the markets reaction to the massive earnings report has been tepid.  Apple beat the street consensus by $0.40 (40% higher).  Nevermind, I know that overall the stock will continue to move up overtime.  With the introduction of the M-class Macs there is going to be a lot of upside to Apple's business.
    viclauyycequality72521mariowincoFileMakerFellerBeatswatto_cobra
  • Reply 6 of 22
    BebeBebe Posts: 142member
    $130?  LOL
    watto_cobra
  • Reply 7 of 22
    lkrupplkrupp Posts: 9,012member
    Investors who sold AAPL on his advice should be able to sue him for damages and incompetent analysis. But I suppose they can’t.
    viclauyycequality72521Beatswatto_cobra
  • Reply 8 of 22
    chasmchasm Posts: 2,340member
    He sure used a lot of rationale to try and obscure the fact that he is BAD AT HIS JOB.
    hydrogenroundaboutnowRayz2016FileMakerFellerBeatswatto_cobra
  • Reply 9 of 22
    genovellegenovelle Posts: 1,131member
    He is still as much as $23 less than some analysts were before the call,  who have been on point most times. Since they have adjusted he is still low by $50. 
    watto_cobra
  • Reply 10 of 22
    jungmarkjungmark Posts: 6,806member
    At least he admitted he was very wrong. Many analysts double down on doom. 
    Beatswatto_cobra
  • Reply 11 of 22
    elijahgelijahg Posts: 2,076member
    Why anyone would take him seriously I have no idea. It wasn't even at the low ent of the range, it was half what some analysts were predicting. Pretty crap analyst.
  • Reply 12 of 22
    maestro64maestro64 Posts: 4,910member
    First, why wasn't he fired.

    I am holding Apple stock and have been holding for a long time. I have bought and sold prior to finally deciding to just buy and hold, but my financial guy compliance office always tell him, he is should not be allowing me to hold too much Apple and I am at too high of risk and swear they must have been listening to this guy at Goldman. I can not tell you how many letters I get from investment guy back office about selling my Apple, what idiots.
    Beatswatto_cobra
  • Reply 13 of 22
    badmonkbadmonk Posts: 968member
    doggone said:
    If I ever took the advice of these types of analysts, I would be considerably poor than I am now.  Point in fact, around the time that I started contributing to a 401k, I also invested into AAPL.  In those 20 years, my 401k had grown about 3 fold (300%) compared to the total contributions.  The APPL investment on the overhand has grown 67 fold (6700%).  I ignored the advice of the investment advisers and analysts when AAPL stock went into the big dips and hung in there.  The stock is now worth the same amount as my 401k using only a fraction of the capital. 
    That choice will make a big difference to my retirement plans.  Of course if I see signs that Apple are beginning to lose their way then I will cash out.  But given the current performance and the promise of their new offerings I am very confident that Apple will continue to overachieve in the near future.
    It always annoys me but I should not be surprised that the markets reaction to the massive earnings report has been tepid.  Apple beat the street consensus by $0.40 (40% higher).  Nevermind, I know that overall the stock will continue to move up overtime.  With the introduction of the M-class Macs there is going to be a lot of upside to Apple's business.
    ditto for me…my financial analysts would always look at me like i had a third eye when i told them about my AAPL holdings.  The problem is that they live in the weeds of their analysis and don’t see the forest of broader cultural trends.
    FileMakerFellerBeatswatto_cobra
  • Reply 14 of 22
    badmonkbadmonk Posts: 968member
    and of course crickets on the street today…obviously the institutional investors are unimpressed by Apple’s triple back flip.

    Let’s see if they wake up tomorrow.
    watto_cobra
  • Reply 15 of 22
    The finance industry needs overhaul like the music industry back in the day.
    watto_cobra
  • Reply 16 of 22
    What a prat. 
    watto_cobra
  • Reply 17 of 22
    65026502 Posts: 365member
    Quite bold of him setting a $130/share price target when Apple currently trades at $133/share.

    Back in the late 90's my broker recommended I sell few shares of Apple that I bought in high school. I didn't and today that $5000 investment is worth $480k. Never used or listened to a broker since.
    FileMakerFellerBeatswatto_cobra
  • Reply 18 of 22
    wood1208wood1208 Posts: 2,506member
    People pay lot to Goldman Sachs for investment help when Goldman is so wrong for so long on Apple stock ? My advice to Goldman Sachs is to fire Rod Hall and hire Katy Huberty to help restore lost reputation.
    Beatswatto_cobra
  • Reply 19 of 22
    michelb76michelb76 Posts: 221member
    I guess the shorting game didn't work.
    watto_cobra
  • Reply 20 of 22
    cincyteecincytee Posts: 329member
    "Our original view ... was clearly wrong."

    I actually respect someone who's willing simply to say this instead of making even more excuses.

    watto_cobra
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