Apple: Color on Quarter (132.65)
- Brean Capital raises their AAPL tgt to $170 from $160; they believe Mar Q results are proof positive that their Buy thesis has teeth; specifically, they continue to believe that Street numbers are materially low through '17. Fundamentally speaking, they believe co stands to deliver material EPS upside from 1) iPhone ships through '17, 2) favorable GM from both iPhones and iPhone mix, and 3) materially more Opex $ leverage through at least '16 as AAPL realizes the benefits from the recent iPhone 6 and iWatch investment cycles. AAPL should continue to return material capital over the next few years that can both catalyze and provide a floor under the stock.
- FBR Capital notes Apple delivered a solid March quarter/June guidance accompanied by its massive capital return program expansion to $200 billion (from $130 billion previously), and we believe the company remains well positioned to further capitalize on fertile growth areas (e.g., Apps, Apple Pay, etc.), with Apple Watch, its solid iPhone 6 product cycle, and China representing major growth opportunities over the coming quarters/years.
- RBC Capital Mkts raises their AAPL tgt to $150 from $142. Mar-qtr results came in materially ahead of consensus and buyside expectations driven by robust iPhone demand. AAPL conservatively guided June-qtr inline with expectations. They see i) sustained momentum with iPhone despite the seasonal lull (~20% of install base has migrated), ii) room for gross-margin expansion vs. initial Jun-qtr guide, iii) Revamp and uptick in AppleTV (June-15 likely), and iv) Apple Watch contributions starting June-qtr but likely accelerate through CY15
- Mizuho raises tgt to $125 from $115. While they are impressed by the company's performance in 2Q and its potential to keep expanding its reach in emerging markets, they remain on the sidelines due to potential headwinds. They think iPhone sales are likely to decelerate meaningfully over the next few quarters creating headwinds for the stock. Although Watch sales are likely to ramp, they are unlikely to offset the void left by slowing iPhone sales and they will likely be margin dilutive.
- Stifel maintains Buy rating and $150/sh. target following Apple's strong reported F2Q15 results and in-line F3Q15 outlook; their forward revenue estimates remain relatively unchanged and EPS moves slightly higher to reflect GM% increase and larger share repo authorization.
- Oppenheimer notes Apple delivered another strong quarter, beating consensus with better-than-expected iPhone sales. The company saw strength in emerging markets, where sales grew 58% Y/Y. They continue to believe Apple will gain share as it's in the middle of its best product cycle driven by its compelling ecosystem. They raise FY15/FY16E EPS from $8.73 and $9.76 to $8.94 and $10.37, respectively, based on updated iPhone sales estimates and adjustments for the new share repurchase program. They take up iPhone estimates, but admittedly, they see much slower unit y/y growth. Thus they assign a lower multiple as they believe investors will have to be comfortable with slower growth with near-perfect execution; $155 tgt
- Maxim notes iPhone channel inventory commentary implies management expects, at best, a 27% q/q decline in iPhone unit sell-through, worst ever. Update to capital return program is simply an extension of current rate from end of CY15 to end of CY17. Projecting a 3% y/y decline in FY16 revenue due to extending iPhone lifecycles in mature markets and digestion period in Greater China; Hold.
- Piper Jaffray raises target to $162 from $160
- Cantor target to $195 from $180
- Susquehanna to $155 from $150
- BMO to $145 from $135
- Nomura to $133 from $129 -- time for stock to take a breather
- Baird to $155 from $135
- Apple (AAPL) was above $136 one hour ago but is now up ~2% near $135 at an all time high in the premarket; market cap is near ~$790 bln.