June quarter earnings report is now just a day away—and analysts just keep tweaking their models and looking ahead to what comes next.
Shares of Apple (ticker: AAPL) were up 0.4%, to $149.18, in afternoon trading Monday. If the gains hold, the stock would set a new closing high, eclipsing the old peak of $149.15 set earlier this month.
The Wall Street consensus for the quarter is $72.9 billion in revenue and profits of $1 a share. Apple has warned that the top line could be clipped by as much as $4 billion by component shortages, but hasn’t provided any detailed guidance for the period.
Baird analyst William Power is repeating his Outperform rating and $160 price target. He projects “strong results,” with a lift from the ongoing work-from-anywhere trend and strong iPhone demand.
“Apple stock typically performs well in the two months leading up to the next iPhone launch,” due in September, Power writes. “With close to 1 billion iPhones in use globally, the 5G upgrade opportunity remains significant, with current U.S. carrier promotions an added tailwind. Coupled with ongoing strength in wearables and services, along with iPad and Mac, we remain positive near and long term.”
Evercore ISI analyst Amit Daryanani affirms his Outperform rating and $175 target, asserting the company can power through ongoing supply-chain headwinds. He thinks the issue will be bigger than $4 billion in the September quarter, “as all signs seem to indicate the situation has gotten worse over the past three months.”
He adds that year-over-year comparisons are getting tougher, and there is “some near-term uncertainty” about the iPhone outlook for the current quarter with the announcement of new phones on the way.
Nevertheless, Daryanani likes the stock. “We remain confident Apple can continue to sustainably grow earnings in the high-teens,” he writes. “In addition, the headwinds we highlight appear to be relatively priced in, given Apple has underperformed the S&P 500 by around 800 basis points year to date.”
Credit Suisse analyst Matthew Cabral remains cautious, repeating his Neutral rating and $150 target price. He expects results slightly above consensus at both the top and bottom lines. He adds that investor focus is shifting to the fall iPhone launch in mid- to late September, and that earnings aren’t likely to be a significant catalyst for the shares.
“Heading into the launch, we’re optimistic 5G momentum continues, though we think it’s more gradual from here given a more incremental set of feature updates this fall and as adoption pushes more mainstream vs. pent-up demand from tech-savvy early adopters for the iphone-12,” he writes.
Write to Eric J. Savitz at [email protected]