Analysts are bullish about Apple after its stock soared to all-time highs

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Apple CEO Tim Cook.
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Justin Sullivan/Getty Images

Analysts are largely bullish on Apple’s prospects after it reported better-than-expected results in its third-quarter earnings on Tuesday – sending the company’s stock to record highs.

Apple beat Wall Street’s expectations on both revenue and earnings, sending its stock jumping more than 5%, and also issued strong revenue guidance for the next quarter – hinting at the launch of an eagerly awaited redesigned iPhone in September.

Apple’s stock is sitting close to $150.

In a research note, analysts for Macquarie wrote that the firm’s call “was one of its most bullish in recent memory,” and they touted augmented reality as a potential growth area: “We expect that in addition to being a key marketing and functional driver of iPhone hardware, AR is going to be directly monetized via the App Store … We think AR will have some important near-term and many significant long-term implications for Apple and others.”

William Blair, meanwhile, said it remained “bullish on the iPhone segment due to a combination of positive demand trends in emerging markets … a weak competitive landscape in the smartphone space … and the company taking an aggressive approach to enabling the device for next-generation applications.”

Not everyone was so positive, though, with Barclays analysts warning that “pre-launch fervor” for the iPhone 8 “could get frothy” and that they remained “skeptical.”

Business Insider has rounded up a load of analyst reactions to Apple’s third-quarter results, and you can read them all below. We have illustrated their comments with charts from BI Intelligence.

But first, here are all the key numbers, via Business Insider’s Kif Leswing:

    Q3 earnings per share (GAAP): $1.67, up 17% year-over-year, versus expectations of $1.57 Q3 revenue: $45.4 billion, up 7% year-over-year, versus expectations of $44.95 billion Gross margin: 38.5%, up 1% year-over-year, versus expectations of 38.2% iPhone unit sales:41.0 million, up 1% year-over-year, versus expectations of 41.1 million iPad unit sales: 11.42 million, up 14% year-over-year Mac unit sales: 4.292 million, flat year-over-year Q4 revenue guidance: $49 billion – $52 billion versus expectations of $49.21 billion

UBS: BULLISH

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BI Intelligence

Rating: Buy

Target price: $180

Comment: “It is striking how every part of the business is doing well. iPhone was flattish despite a pause with double-digit installed base growth. Services accelerated to a 22% increase. Macs gained share. iPad units were up a surprising 15% on a refreshed line. Watch units jumped by 50%. Then there is new product potential led by A/R, which plays to Apple’s strengths. Investors are appreciating that this is a franchise and not just a product cycle play. That said, we like the iPhone 8 product cycle with its “pig in the python” upgrade potential and raise our price target from $170 to $180.”


Piper Jaffray: BULLISH

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BI Intelligence

Rating: Overweight

Price target: $190

Comment: “The outlook implies that fears of an iPhone X launch delay, and/ or limited availability of the device, may have been overblown. We recommend owning AAPL due to growing anticipation around iPhone X and a favorable trajectory for services revenue.”


Macquarie: BULLISH

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BI Intelligence

Rating: Outperform

Price target: $180

Comment: “We thought AAPL’s 3Q call was one of its most bullish in recent memory. Despite a coming big refresh, iPhone posted better than expected growth, and virtually all products in almost all geographies posted solid growth. Our focus remains on Services, and while AAPL didn’t provide App Store growth, it is clear that Services will remain the key number-two driver behind iPhone for the foreseeable future. We also think it is important to note AAPL and Tim Cook’s clear excitement about the potential for AR. We expect that in addition to being a key marketing and functional driver of iPhone hardware, AR is going to be directly monetized via the App Store. As Cook stated on the call, we “couldn’t be more excited about AR”, and despite our WAY too early call on VR, we think AR will have some important near- term and many significant long-term implications for Apple and others.”


Bank of America Merrill Lynch: BULLISH

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BI Intelligence

Rating: Buy

Price target: $180

Comment: “Our PO of $180 is based on 16x our C2018 EPS estimate of $11.16. Our target multiple compares to the long-term historical range of 9-15x (median 12x). We believe a higher than historical multiple is justified given the anticipation of a strong upcoming iPhone 8 cycle where we expect smoother, more consistent growth in iPhone units. We also think a 16x multiple is justified given large cash balance and opportunity to diversify into new end markets and, and increasing mix of services. The multiple also reflects the potential for new repatriation tax laws that would allow for repatriation of a significant portion of the company’s foreign cash.”


Credit Suisse: BULLISH

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BI Intelligence

Rating: Outperform

Price target: $170

Comment: “We view this release as positive.”


Citi: BULLISH

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BI Intelligence

Rating: Buy

Price target: $160

Comment: “Macroeconomic conditions or shifting consumer demand could cause greater- than-expected deceleration or contraction in the handset and smartphone markets. This would negatively impact Apple’s prospects for growth, and the shares may fail to achieve our target price as a result.”


William Blair: BULLISH

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BI Intelligence

Rating: Outperform

Price target: n/a

Comment: “On the iPhone front, while the results were marginally below Street expectations on revenue, we believe the upcoming product cycle refresh should be a positive catalyst to the stock. Furthermore, on a longer-term basis, we remain bullish on the iPhone segment due to a combination of positive demand trends in emerging markets (both China and India), a weak competitive landscape in the smartphone space (with Samsung, the only high-end alternative, witnessing structural challenges), and the company taking an aggressive approach to enabling the device for next-generation applications (such as AR).”


Barclays: NEUTRAL

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BI Intelligence

Rating: Equal Weight

Price target: $146 (previously $123)

Comment: “Pre-launch fervor could get frothy … Yes, that’s right; iPhone is just trudging along before the next launch. The Sep-Q outlook came in better than expected, which could fuel the Bulls’ exuberance that the next iPhone launch could rival the iPhone 6 (IP6) mega-growth cycle. We are somewhat skeptical, though, as Jun-Q results reveal other drivers beyond the iPhone for the incremental goodness. iPhone ASP trends are hardly improving despite what the company referred to as strong IP7 Plus mix. Further, the broader market push to the midrange in smartphones and increasing competitive intensity in China could become bigger long- term headwinds.


Deutsche Bank: NEUTRAL

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BI Intelligence

Rating: Hold

Price target: $140

Comment: “Apple delivered upside to results and guidance in a quarter that most investors weren’t particularly focused on. The big upside surprise came from iPad sales, while Services also saw improving trends. The focus for investors, however, is the next iPhone launch, with mgmt’s guidance implying a relatively normal sequential increase, which may suggest speculation about iPhone delays are unfounded. We felt mgmt delivered a good quarter, but we continue to believe the market is overly optimistic on future iPhone sales. Given a saturated smartphone market, elongating refresh cycles, increased competition in China, and a growing secondary market, we think Apple will have a hard time delivering on Street expectations. We continue to view Apple as a trading stock, and believe shares will trade at the higher end of their historical range while current market multiples are elevated.”


Morgan Stanley: n/a

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BI Intelligence

Rating: n/a

Price target: n/a

Comment: “iPhone model transition impact in 3Q is not as bad as the market feared; this bodes well for the supply chain holding to our new iPhone build rate estimates of around 100mn units (up ~20% YoY) in 2H17. Strong new product lineup in coming months, including iPhone, Watch 4 and HomePod, on top of recovering demand in refreshed iPad and Mac demand, should support the building momentum to the related supply chain for better profit growth outlook in 2H17.”