Financial results with its stock sitting at the top of its December quarter financial results. Expectations on Wall Street have been steadily rising since the initial sales of the iPhone 12 lineup closed in the middle of the quarter, particularly with high expectations for iPhone sales.
Street also has high expectations for MacBook sales, driven by the introduction of the first laptops powered by Apple-designed processors, and continuing with the epidemic-inspired work-from-home trend. Throw in expectations for continued strong demand for iPads, wearables and services, and you have a recipe for a strong quarter.
The only question is whether expectations have gone too far.
Apple (ticker: AAPL) did not provide guidance for the quarter, which adds an element of volatility to this report. Street consensus has revenues of $ 102.8 billion and profits of $ 1.40 per share. For the seasonally soft March quarter, Street sees $ 90.9 per share in revenue and $ 78.9 billion in profits.
IPhone revenue grew by 6.4% to $ 59.6 billion according to Street consensus estimates tracked by FactSet, with double-digit growth in all other categories. Sales of iPads at a consensus $ 84 billion are 23.4%; MAC sales of $ 8.6 billion, up 20.4%; Wearable sales of $ 11.5 billion, up 14.8%; And revenue of $ 15.2 billion, up 19.3%.
Investors will also be eager to see if the company offers earnings guidance.
On Friday, Cowen analyst Krishna Shankar reiterated its Outperform rating on Apple, raising its price target from $ 133 to $ 153. The company expects the company to beat expectations for the quarter on both the top and bottom lines of the iPhone, particularly from strong iPhone demand. He is estimating $ 1.46 per share in revenue and $ 104.5 billion in profits. The analyst estimates that Apple sold 77 million iPhones in the quarter, 97% sequentially and 7% year-over-year. He sees iPhone revenue of $ 60.1 billion compared to 7% a year earlier, with services revenue increasing 26% to $ 16 billion. Apple remains the top pick of Sankar in the IT hardware sector.
Morgan Stanley analyst Katy Huberty raised her price target from $ 144 to $ 144 last week, repeating her overweight rating on Apple stock. She writes that her checks show that Apple saw strength in its portfolio of products and services in the quarter, driven by 5G iPhone adoption, work-and-learning-in-home trends and continued engagement with the App Store was inspired.
Huberty wrote in a research note, “We are buyers ahead of what is expected to be the December quarter print. “” From our recent talks, investors expect Apple to release a solid, but not spectacular, December quarterly result. We disagree and believe that Apple is likely to record quarterly revenue and earnings. “
Huberty expects double-digit revenue growth across all revenue segments, with “risk reversed” for iPhones, Macs and services. Its revenue estimate for the quarter is $ 108.2 billion, more than the consensus consensus of $ 102.6 billion. She sees profits of $ 1.50 per share, $ 1.40 on Street, in the December quarter.
Huberty feels that the iPhone 12 was Apple’s most successful product launch in the last five years. She forecasts 78 million iPhones shipped in the quarter at an average selling price of $ 825, pushing 14% revenue growth to $ 63.9 billion – a growth rate that is currently the road consensus for iPhone revenue.
Analyst Anand Barua of Loop Capital recently reiterated its Buy rating, raising its target price to $ 155 from $ 131. Barua wrote in a research note that he expects a “really big year” for Apple and feels the signs should be clear from the upcoming earnings report. Barua feels that both iPhones and Macs are powered by strength, near term and the whole calendar could be upside down to street numbers for 2021. Barua also feels that the company can rise above healthy growth in iPads, AirPods, Watch and Services.
Evercore ISI analyst Amit Daryani recently reiterated his Outperform rating on Apple shares, raising his price target on the stock from $ 135 to $ 145. Daryani pointed to a combination of better-than-expected unit demand and higher-than-expected average selling prices, as consumer demand leads the trend toward higher-end Pro and Pro Max versions of the new phone line. He also noted “better services development”, with downloads from the App Store increasing by more than 30%.
Apple shares closed at a record $ 142.92 on Monday. After an 82% rally last year, the stock is close to 8% in 2021 so far.
Write Eric J. at [email protected] Savitz