>>> Apple: Color on Quarter --> -4.18% @ 95.85 pre open (Support 95.10, 93.40 & 91.30)
Apple: Color on Quarter
- FBR Capital lowers their AAPL tgt to $130 from $150 after Apple delivered respectable Q1 (Dec) headline numbers, generally hitting the Street's bogey (75 mln iPhone unit number) while exceeding the Street's expectations on the bottom line. Overall, the quarter took a back seat to March guidance, which was the Street's focus as Cook finally ripped the band-aid off and lowered Cupertino's outlook based on softer 6s demand and a choppy macro. They would characterize a 50 million-plus iPhone unit bogey as "better than feared," although this was nothing to write home about. Clearly, Cook & Co. have a few tough quarters ahead until they get to the buildup around iPhone 7 later this year, which is what bulls (including them) are focused on to turn this ship back into growth waters. Apple has been in this position before, although pressure is building for Cook to show success outside its core iPhone DNA to give investors confidence in a multifaceted growth story heading into the next few years via organic and potentially acquisitive means with $200 billion-plus of cash.
- Cowen: With guide that was not as bad as some investors feared, the hardest compare is now on the tape. This factor and numbers which imply downside to only ~$90 make this a relatively safe investment at this price. However, they still see AAPL broadly in a period of transition where an upgrade on their part would require a new product cycle or market - both of which still remain elusive.
- Mizuho notes that Apple reported F1Q16 results that were mostly inline with investor expectations and its guidance was light. While the co's macro commentary was sobering and China slowed down meaningfully, its core franchise remains strong. Apple reported 25% growth in its installed base, which remains highly loyal and could generate recurring revenues for the firm. While they might have to wait until mid-2016 for the stock to work, risk reward seems attractive; Buy.
- RBC notes AAPL reported an inline Dec-qtr and guided Mar-qtr better than buyside expectations (but below street numbers). Stock saw a muted (negative) reaction after hours reflecting -- 1) macro concerns, a huge shift in tone as AAPL on the EPS call sounded more susceptible to China macro vs. 90-days ago, 2) Services disclosure: While they appreciate the incremental clarity, fear is are they doing it because iPhone units are ex-growth? They think AAPL remains rangebound in the near term until we get closer to Apr-qtr (capital allocation update) and beyond that they expect iPhone 7 cycle to drive momentum in H2:16.
- Stifel cuts tgt to $120 from $140. Investors are now left to balance Apple's weaker F2Q16 (Mar '16 -- see below) outlook against already deflated expectations (note: they view iPhone outlook as in-line w/ their previously reported low-50M est.; better than their belief that sentiment could have declined into the mid-40M range) and a current valuation at 11x P/E on updated C2017 EPS estimate of $10.02 (prior street: $10.47/sh.); trading at ~5.1x EV/EBITDA and 6.3x trailing EV/FCF (16% yield). They adjust F2016 and F2017 from $236.5B / $9.33 and $266.6B / $10.75 to $223.5B / $8.87 and $235.1B / $9.71, respectively (prior street: $236.5B / $9.47 and $250.3B / $10.35). Maintain Buy.
- Piper Jaffray lowers their AAPL tgt to $172 from $179