Analysts Confident Apple Ahead of AAPL Earnings Call

Some analysts believe that Apple has managed to deal with supply-chain issues caused by the Covid pandemic better than its rivals at the end of last year. It could also surpass Wall Street growth targets of six percent when it announces its latest earnings on Thursday. Reuter has a nice round-up of analyst opinion.

We expect Apple to reach its highest market share in China since Apple entered the market in 2008,” said analyst Nicole Peng of Canalys. Investment firm Wedbush Securities forecasts record iPhone sales of more than 40 million units during the holiday period from Black Friday to Christmas. Morgan Stanley estimates total holiday quarter iPhone shipments at 83 million, representing a 4% increase from the previous year. Wall Street analysts expect Apple to post about $118.7 billion in revenue, representing 6.48% year-over-year growth, and quarterly earnings per share of $1.89, according to Eikon data as of Tuesday.

Morgan Stanley Sets US$200 Target Price For AAPL - Cites Apple Car, AR/VR

Morgan Stanley has set AAPL a US$200 price target. In a note seen by AppleInsider, the bank cited Apple’s expected moves into cars and AR/VR as the reasons for this price hike.

Lead analyst Katy Huberty said that the bank is cautious on IT hardware heading into 2022 but noted that Apple should benefit from “a light to quality,” driven by new products being priced-in, as well as the iPhone and App Store Huberty points out that Apple shares don’t appear to bake-in the impact of new products. She points out that Apple is developing products aimed at both the AR/VR and self-driving car markets, and the new price target reflects that. “Today, we know that Apple is working on products to address two significantly large markets – AR/VR and Autonomous Vehicles – and as we get closer to these products becoming a reality, we believe valuation would need to reflect the optionality of these future opportunities,” she wrote.

Mac and Services to Provide AAPL Upside

AAPL investors can still expect an upside when during Apple’s forthcoming earnings call thanks to Mac and services. That’s according to J.P Morgan analyst Samik Chatterjee in a note seen by AppleInsider.

Lead analyst Samik Chatterjee writes that the setup heading into Q1 2021 earnings is “dramatically different than the last one,” since the focus on near-term earnings drivers has moderated after the busy holiday season. Specifically, iPhone builds are slowing down, led primarily by softening smartphone shipments in China and slowing momentum of 5G-equipped iPhone 12 and iPhone 12 Pro sales. Relative to sell-side consensus, Chatterjee believes investors are primed for softer results. However, the analyst still expects modest upside to investor expectations. He cites strong growth in Services and the current momentum in Mac and iPad shipments as the primary driver, despite concerns that work from home trends will wear off. JP Morgan is tracking iPhone revenue in line with expectations.

Morgan Stanley Lowers AAPL Target Despite Services Growth

Morgan Stanley analyst Katy Huberty has lowered her target price for AAPL. However, according to a note seen be Apple 3.0, she did forecast that Apple Services revenue growth will increase by 6 points during 2021.

From a note to Morgan Stanley’s clients that landed on my desktop Tuesday: “Services strength drives estimates higher but peer multiple compression drives PT lower to $155 (from $164). Following strong March quarter App Store results and an analysis of the key drivers of Apple’s Licensing & Other segment, we raise our already above-street FY21 and FY22 Services revenue estimates by 3% and 5% respectively, and are increasingly convinced that consensus Services forecasts over the next 2+ years are too low. We now forecast Apple Services revenue growth accelerates by 6 points to +22% Y/Y in FY21, up from +19% Y/Y previously, nearly 4 points ahead of FY21 consensus Services growth of +18% Y/Y.”

UBS Upgrades AAPL, Thinks Firm Will Make Big Impact in Electric Vehicle Market

UBS analyst David Vogt upgraded AAPL to a Buy and raised the price target to US$142 from US$115, Yahoo Finance reported. This upgrade was in no small part based on the impact he thinks Apple can make in the electric vehicle market.

Our analysis of the auto market and Apple’s multi-year investment in the industry (self-driving car licenses and LiDAR patents) suggests to us Apple’s auto optionality is worth at least an incremental $14/share,” Vogt said in a research note to clients. “Apple’s current portfolio provides significant cash flow the company will likely utilize to enter the battery electric vehicle market.” Vogt says Apple can capture some of the battery electric vehicle (BEV) market given customer satisfaction is already high for the tech giant’s products. “We expect Apple’s platform strategy and market share in the global PC and smartphone markets should enable Apple to introduce a branded BEV and achieve a minimum 5% market share in the global BEV market,” he wrote. “Over the next ten years, we forecast the global automotive market will likely transition to almost 100% EV opening up a 90M unit market to new entrants with large installed bases of loyal satisfied customers like Apple.”

When AAPL Overtook Walmart

There’s been much talk in recent days, as Apple’s market cap has slipped at points to sit below the US$2 trillion mark. Cult of Mac shared a timely reminder of when AAPL first overtook Walmart stock.

At the time, AAPL was trading at $226 per share. Today, it trades at $275.43. If that doesn’t seem much of an increase, bear in mind that a 7-to-1 stock split took place in 2014 after AAPL peaked at $645. If that split hadn’t happened, Apple would now be trading at approximately $1,925. It didn’t take Apple long to catch up to market leaders ExxonMobil and Microsoft, either. In May 2010, Apple overtook Microsoft, surpassing the tech giant that dominated Cupertino during the previous decade. A little over a year after that, on August 9, 2011, Apple blew past oil giant ExxonMobil to become the world’s most valuable company. In all, it was an astonishing turnaround for a company that came perilously close to going out of business during the 1990s.