Text size
Apple shares are below a high of $ 136.69, reached on December 28, 2020.
Justin Sullivan / Getty Images
appeal
Shares rise higher as investors in megacap technology stocks pile up ahead of the upcoming wave of earnings reports in December quarter. Apple will report the results next Wednesday, January 27, and Street’s expectations are becoming more positive by the day, leaving its shares just a few points below their everyday highs.
Morgan Stanley analyst Katy Huberty on Thursday reiterated her overweight rating on Apple shares and raised her price target to $ 152 from $ 144. She writes that her checks reveal that Apple sees strength in its product and service portfolio for the quarter, driven by 5G iPhone adoption, the work-and-learn-from-home trend and continued engagement with the App Store.
“We are buyers ahead of what we expect to be a record pressure in December quarter,” Huberty wrote in a research note. ‘Our recent talks suggest that investors expect Apple to deliver good, but not good, quarterly results in December. We disagree and believe that Apple is likely to report quarterly annual revenue and earnings. ”
Huberty expects the double-digit increase in revenue in all revenue segments, with ‘upside-down risks’ for iPhones, Macs and Services. Her estimate for revenue for the quarter is $ 108.2 billion, well above the $ 102.6 billion consensus. She sees earnings for the December quarter of $ 1.50 per share, above the street of $ 1.40. (Note that the company did not provide any clues for this quarter, citing the uncertainty surrounding the pandemic.)
“We expect demand strength to continue and our fiscal 2021 revenue and EPS estimates are both 5% above consensus,” she writes. “As the position in the quarter has dampened after the exchange of high-quality shares over the past few months, we expect a strong consequence of the after-earnings.”
Huberty believes the iPhone 12 was Apple’s most successful launch of the past five years. She predicts 78 million iPhones shipped in the quarter at an average selling price of $ 825, generating revenue growth of 14% to $ 63.9 billion – twice the growth rate currently predicted by the Street Consensus for iPhone revenue . And she expects the momentum in iPhones to continue until 2021. She notes that Apple’s Taiwanese supply chain partners have had three consecutive months of year-on-year sales growth, which she says indicates strong iPhone sales in the coming quarters.
DA Davidson analyst Tom Forte also reiterated his buy rating on the stock, noting that the stock looked “delicious” even though it pushed past its $ 133 price target. (He says his target is ‘under review’ pending next week’s earnings report.) Forte also has estimates above the consensus for the quarter – he sees $ 106.2 billion in sales, with a profit of $ 1, 52 per share. “We believe that Apple’s first line of smartphones is better positioned on 5G networks than investors fully appreciate,” he wrote in a research note.
Monness Crespi Hardt, analyst Brian White, also reiterated his Buy rating while maintaining his target price of $ 144. White’s estimates call for $ 105.3 billion in sales and earnings of $ 1.47 per share. ‘The strength and linearity of this economic recovery remains a major card; however, we believe that Apple’s strong balance sheet, iconic brand, fast-growing services business, pipeline of innovations and tough personal privacy stance can make the company emerge stronger from this crisis, ”he writes.
Apple shares rose 3.1%, at $ 136.10, in recent trading. The stock rose more than 6% in the first two days of the Biden administration, increasing its market capitalization by $ 133 billion over that short period. The stock is below a high of $ 136.69, reached on December 28, 2020, as well as its record intraday peak of $ 138.79, which touched on December 29. Apple shares have a market value of $ 2.278 billion. and Apple remains the world’s most valuable company.
Write to Eric J. Savitz by [email protected]