A customer service representative works with customers at the Apple Store as shoppers return to indoor shopping after Los Angeles County eased restrictions in places like the Beverly Center in Beverly Hills on Oct. 8, 2020.
Genaro Molina | Los Angeles Times | Getty Images
Apple will report fiscal first quarter 2021 earnings next week, and analyst expectations are optimistic.
The company failed to stimulate investors in the fourth quarter, which ended September 26, due to weak iPhone sales. But the weakness was likely because people were waiting for the new iPhone 12, which didn’t go on sale until October.
Wednesday’s earnings report marks the first full season since Apple released its new line of iPhones and bundles of subscription services.
The company’s stock traded above $ 136 a share, up more than 3% on Thursday morning amid broader market gains.
Here’s what analysts say about the tech giant:
Morgan Stanley
Morgan Stanley analysts said in a note on Thursday that they expect a record quarter in December.
“Our recent talks suggest investors expect Apple to post solid, but not great, quarterly results for December. We disagree and think Apple is likely to report record sales and earnings on a quarterly basis,” the analysts wrote, saying their price target increased to $ 152. down from $ 144. “In our opinion, the iPhone 12 is Apple’s most successful product launch in the past 5 years.”
The company pointed to strength in Apple’s product and services portfolio, driven by 5G adoption, continued remote working and learning, and continued engagement with the App Store. Analysts added that in the December quarter, they expect double-digit annual growth for Apple’s five revenue segments.
Overall, our $ 108.2 billion sales in December are 5% ahead of consensus (we’re ahead of consensus in every segment except Services), while our $ 1.50 earnings per share are 7% higher than the consensus, ”they said. “We expect demand to remain strong and our earnings and earnings per share estimates for FY21 are both 5% above consensus.”
DA Davidson
The company said Thursday that the stock “looks great” and scrutinized its $ 133 price target.
As stated earlier, we believe that Apple’s first line of smartphones on 5G networks is better positioned than investors fully appreciate, for the following reasons: 1) carrier support, 2) favorable discretionary revenues, and 3) 1 billion remote working and 1 billion remote learning We also attribute the recent strength in stocks to investors warming to this thought, ”wrote DA Davidson analyst Tom Forte.
The company said it will pay attention to iPhone sales trends, comments on privacy and advertising, and possible implications of the new Biden administration.
“We expect sales to increase 15.7% to $ 106,236 million, which is higher than the consensus forecast of $ 102,563 million,” the company said. “Note, Apple did not provide formal guidance, but it expected double-digit growth across all product categories, but expected iPhone, which expects single-digit growth. 6%), which is higher than the consensus figure of $ 31,763 million. Finally, we expect GAAP earnings per share of $ 1.52, compared to the consensus estimate of $ 1.40. “
AB orange
The company expects Apple to post strong iPhone sales, but said there is little surprise given a likely strong iPhone 12 cycle. The analysts, including Toni Sacconaghi, raised their Earnings Per Share estimates for the first quarter to $ 1.53 and Earnings Per Share for FY21 to $ 4.26 due to higher average selling prices for the iPhone, a weaker US dollar and strong Mac / iPad sales.
“While our estimates are above consensus, we believe our numbers are relatively in line with buy-side expectations,” the analysts said. “We expect Apple to provide ‘guidelines’ rather than ‘guidelines’ for the second quarter, but are above consensus, probably because of the currency, and our expectation of modestly stronger than normal seasonality due to the timing of the iPhone rollout 12. “
The company said it would heed Apple’s comments about potential gains from smartphone shares, ongoing regulatory concerns, and Apple’s adoption of new services and advertising, but said Apple needs something bigger to exceed expectations.
“AAPL has had a tremendous run and is trading in line with major technology companies with higher growth rates. At 33x the consensus 21 WPA, and expectations above Street’s expectations, we struggle to see arguments for material outperformance in AAPL, without a surprise product announcement or migration to a bundled hardware subscription model, ”they wrote.
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