Analysts Bullish Following AAPL First Quarter Earnings

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Analysts reacted positively to Apple’s strong set of first-quarter results. Leading banks and financial institutions put up their target price for the stock in response.

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Bullish Outlook and Raise Target Prices

In a bullish J.P. Morgan note, seen by AppleInsider, analyst Samik Chatterjee wrote:

Investor enthusiasm headed into the quarter was led by the strong response to Wearables, but following the earnings announcement investors will likely now focus on both Wearables and iPhones to be the drivers of upside going forward. The momentum on iPhone revenues is the primary driver of the upward revision to our revenue and earnings forecasts.

Mr. Chatterjee also raised the bank’s AAPL target price for December 2020 from $300 a share to $350.  Elsewhere, Cowen also raised its target price from $350 a share to $370 (via AppleInsider).  Haris Anwar, senior analyst at financial markets platform also had a bullish outlook. “It’s a very strong earnings report that exceeds analysts’ expectations in many ways,” he said. “The biggest driver is Apple’s revival in iPhone growth, which surpassed expectations by a large margin.”

He added:

The other factor driving these robust earnings was the company’s wearables division, which had a particularly strong quarter thanks to rising demand for Apple Watch and AirPods. The 37 percent revenue growth for those products confirms that Apple is ramping up its focus on products besides its flagship iPhone that diversifies the company in a powerful way. This potent mixture of strength in the core product and rising diversification is what has been driving Apple stock to record highs almost every other day.

Coronavirus Risk

However, despite the generally bullish response, both Cowen and J.P. Morgan noted the potential risk to Apple posed by the coronavirus outbreak. Mr. Chatterjee Apple had incorporated the issue into its guidance, meaning the year ahead could be more positive for the firm were the virus to be contained. Krish Sankar at Cowen wrote:

 The greatest [near-term] risk is the unfortunate impact of the coronavirus on daily life in China as revenues from the Greater China region are vital to overall iPhone sales.

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