While the shares of Apple Inc. despite a massive earnings report decline, many analysts applaud the company’s future.
The smartphone giant posted $ 1.68 per share in earnings on Wednesday afternoon on revenue of $ 111.4 billion, both record numbers well above consensus forecast. The company’s iPhone business alone delivered holiday sales that were $ 6 billion higher than consensus.
After the strong report, investors are wondering whether Apple AAPL,
can maintain its momentum, as Chief Executive Tim Cook pointed out in response to a question about the company’s earnings call. Cook argued that Apple still has significant organic growth opportunities as a result of newer products such as wearables, emerging markets, business sales and more.
Oppenheimer analyst Andrew Uerkwitz wrote positively about Apple’s potential in more mainstream product categories.
“We believe that Mac (high single digit share) and iPhone (small share of teenagers) have the most to gain, driven by Apple Silicon and 5G adoption respectively,” he wrote, referring to Apple’s modified M1 chip that it is gradually increasing. the rolling is. to his Mac line-up. “We expect the significant performance / energy efficiency gains that M1 has shown (first generation only!) Over mainstream competitors and closer integration between Mac and iOS devices to revive Mac’s growth. and convince more users to switch from Windows PC to Mac. ”
He has an outperform rating and a target price of $ 160 on the stock.
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Jefferies analyst Kyle McNealy wrote of an “impressive quarter and more to come” as Apple is still in the “early innings” of selling 5G devices. He is optimistic about “a huge established base in China in need of upgrades” and a weakened Huawei as a result of US export restrictions. The strong iPhone cycle could also continue to be a catalyst for increased services and wearables revenues, he said.
McNealy rates the stock as a buy with a target price of $ 160.
Raymond James analyst Chris Caso also suggested that this latest report could be the start of a strong iPhone journey in a note titled “We’ve got the 5G cycle we’ve been looking for, we don’t think it’s over . ” He wrote that Apple not only saw higher sales in December than it expected, but also saw strong margins as a result of a larger mix of more expensive devices.
“While Apple has performed in this cycle, we have long viewed this as a 2-year 5G cycle, with better global 5G coverage providing greater incentive for upgrades, along with what we expect to be a new form factor”, he wrote. while maintaining an outperform rating and raising his price target from $ 150 to $ 160. “We expect services to benefit from the improvement in unit count (adding to the installed file), along with new service offerings.”
Bernstein analyst Toni Sacconaghi wrote that Apple’s “most notable” revelation was that the iPhone 12 Pro models sold “particularly well” in the last quarter, despite some economic pressure from the pandemic.
He sees the tailwind for Apple for much of the current fiscal year as remote working trends drive more technology purchases. “Ironically, despite some retail locations being closed, Apple appears to have benefited greatly from the reallocation of consumption dollars during the pandemic,” he wrote. “That said, we are concerned that the strength of an iPhone upgrade cycle and the FY22 pandemic could diminish amid increasingly difficult YoY comparisons for the company.”
He has a market performance rating on the stock and raised his price target from $ 120 to $ 132.
Apple shares are up 27% in the past three months as the Dow Jones Industrial Average DJIA,
is up 16%.