A customer service representative is working with customers in the Apple Store while shopping returns to in-store shopping after Los Angeles County eased restrictions on October 8, 2020 at locations such as the Beverly Center in Beverly Hills.
Genaro Molina | Los Angeles Times | Getty Images
Apple will report its fiscal earnings in the first quarter of 2021 next week, and analysts’ expectations are positive.
The company did not excite investors in the fourth quarter, which ended on September 26, due to weak iPhone sales. But the weakness was probably because people were waiting for the new iPhone 12, which was only on sale in October.
Wednesday’s earnings report is the first full season since Apple announced its new range of iPhones and subscription service bundles.
The company’s share traded higher than $ 136 per share, rising more than 3% on Thursday morning amid larger market gains.
This is what analysts say about the technology giant:
Morgan Stanley
Morgan Stanley analysts said in a note on Thursday that they expect a record quarter in December.
“Our recent discussions suggest that investors expect Apple to deliver solid, but not good, results in the December quarter. We disagree and believe that Apple is likely to report quarterly earnings and earnings of all time,” wrote the analysts, raising their price target to $ 152. from $ 144. “In our opinion, the iPhone 12 has been the most successful Apple product launch in the last five years.”
The firm pointed to strengths in Apple’s product and service portfolio, driven by 5G adoption, sustained work and distance learning, and sustained App Store engagement. Analysts added that they expect double-digit growth on an annualized basis for Apple’s five revenue segments in the December quarter.
‘Overall, our revenue of $ 108.2 billion in December was 5% higher than the consensus in the quarter (we are the consensus in all segments except services), while our profit of $ 1.50 is 7% higher is as the consensus, ‘they said. “We expect demand strength to continue and our FY21 revenue and EPS estimates are both 5% above consensus.”
DA Davidson
The firm said in a Thursday note to clients that it believes the stock “looks great”, and scrutinized its $ 133 price target.
“As we said earlier, we believe that Apple’s first line of smartphones is better positioned on 5G networks than investors fully appreciate for the following reasons: 1) carrier support, 2) favorable discretionary revenue, and 3) 1B working remotely and 1B learning from a distance … We also attribute the recent strength in equities to investors warming up this perception, “writes DA analyst Tom Forte.
The firm said it would pay attention to iPhone sales, comments on privacy and advertising and the possible implications of the new Biden administration.
“We plan sales to increase by 15.7% to $ 106,236 million, which is higher than the $ 102,563 million consensus forecast,” the firm said. “Note that Apple did not provide formal guidelines, but did expect double-digit growth for all product categories for the iPhone, which expects single-digit growth. On profitability, we estimate $ 33.525 million in EBITDA (for a margin of 31, “), Which is above the $ 31,763 million consensus figure. Finally, we project GAAP earnings of $ 1.52, compared to the $ 1.40 consensus estimate.”
AB Bernstein
The firm expects Apple to post strong iPhone sales, but says there are few surprises due to a likely strong iPhone 12 cycle. Analysts, including Toni Sacconaghi, raised their EPS estimates to $ 1.53 in the first quarter and FY21 EPS to $ 4.26 due to higher iPhone ASPs, a weaker US dollar and a strong Mac / iPad sales.
“Although our estimates are above consensus, we believe our numbers are relatively in line with outside expectations,” analysts wrote Thursday. “We expect Apple to provide ‘guidelines’ rather than ‘guidance’ for Q2, but are above consensus, probably due to currency, and our expectation is that it will be a modest stronger than normal seasonality due to timing. of the iPhone 12 implementation. “
The firm said it would pay attention to Apple’s comments about potential gains from smartphones, ongoing concerns about regulations and Apple’s adoption and announcements about new services, but said Apple needed something bigger to exceed expectations.
“AAPL has had a tremendous run and trades in line with large technology companies with higher growth rates. At 33 times consensus of 21 EPS, and the expectations from the outside above the street, we are struggling to see case for significant performance in AAPL , in the absence of a surprise product announcement or migration to a composite hardware subscriber model, ‘the author wrote.
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