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Apple shares are slightly below its all-time closing high of $ 136.69, reached on December 28, 2020.
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Apple
stocks are rising as investors accumulate megacap technology stocks ahead of the next wave of earnings reports for the December quarter. Apple will release the results next Wednesday, January 27, and Street’s expectations are growing more every day, leaving its shares just a few points below its historic highs.
Morgan Stanley analyst Katy Huberty reiterated her overweight rating for Apple shares on Thursday and raised her target price from 144 to $ 152. She writes that her checks found that Apple saw strength in her portfolio. of products and services in the quarter, driven by the adoption of the iPhone 5G, the “work and learn at home” trend and continued involvement with the App Store.
“We are buyers ahead of what we expect to be an impression record in the December quarter,” writes Huberty in a research note. “Our recent talks suggest that investors expect Apple to report solid, but not great, results for the December quarter. We disagree and believe that Apple is likely to post record quarterly earnings and earnings of all time. “
Huberty expects double-digit revenue growth across all revenue segments, with “risks tilted to the upside” for iPhones, Macs and Services. Its revenue estimate for the quarter is $ 108.2 billion, well above the $ 102.6 billion consensus. It sees December quarterly earnings of $ 1.50 per share, up from Street at $ 1.40. (Note that the company did not provide any guidance for this quarter, citing the uncertainty associated with the pandemic.)
“We expect the strength of demand to continue and our 2021 tax revenue and EPS estimates to be 5% above consensus,” she writes. “Given that the positioning in the quarter was silenced after the rotation of high quality stocks in the last few months, we expect a strong follow-up after profits.”
Huberty believes the iPhone 12 was Apple’s most successful product launch in the past five years. It predicts that 78 million iPhones were shipped in the quarter at an average selling price of $ 825, generating revenue growth of 14% to $ 63.9 billion – double the growth rate that the Street consensus projects currently for iPhone revenue. And she expects the iPhones momentum to continue in 2021. She notes that Apple’s Taiwanese supply chain partners have had three consecutive months of accelerating sales growth year on year, which she believes is a sign of strong iPhone sales. in the coming quarters.
DA Davidson analyst Tom Forte also repeated his buy rating for the stock, noting that the stock looks “delicious” even though it has exceeded 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 sales of $ 106.2 billion, with earnings of $ 1.52 per share. “We believe that Apple’s first line of smartphones on 5G networks is better positioned than investors fully appreciate,” he writes in a research note.
Monness analyst Brian White of Monness Crespi Hardt also repeats his Buy rating, while maintaining his target price of $ 144. White’s estimates point to $ 105.3 billion in sales and earnings of $ 1.47 per share. “The strength and linearity of this economic recovery remains a wildcard; however, we believe that Apple’s strong balance sheet, iconic brand, fast-growing services business, innovation pipeline and hard-line stance on personal privacy will allow the company to emerge from this stronger crisis, ” he writes.
Apple’s shares rose 3.1% to $ 136.10 in recent trading. The stock rose more than 6% in the first two days of the Biden government, increasing its market value in that short period by $ 133 billion. The stock is slightly below its all-time closing high of $ 136.69, reached on December 28, 2020, as well as its record intraday peak of $ 138.79, which reached on December 29. Apple shares have a market value of $ 2.278 trillion, and Apple remains the most valuable company in the world.
Write to Eric J. Savitz at [email protected]