Apple's early pre-delivery alerts earlier this month focused on China's economic slowdown and declining iPhone sales, causing panic in the market. Apple's latest financial report has announced that although revenue, profits and prospects are not bullish but generally let Wall Street sigh with relief! Many analysts' response to Apple's performance is "better than expected," not as bad as expected.
In the US, the day after Apple's earnings report was released, Apple's stock price (AAPL-US) rose nearly 5 percent on Wednesday after the analyst's report was released one-by-one .
Many analysts largely disregard Apple's sales for the first time, no longer counting iPhone, iPad and Mac sales, but Apple's profitability in exposing its service business should not be underestimated.
JPMorgan Chase Samik Chatterjee said: "The gross margin of the services department is 62.8%. The new release of a glimmer of hope can boost investor expectations about the intrinsic value of Apple shares."
Morgan Stanley analyst Katy Huberty posted a post in Apple's earnings report, "Reasons to See More Apples," she said in the article: "The important thing is that Apple's profits have lowered investors' perceptions about key recent issues – weak demand for iPhone ". Gross margin risk and service growth slowed. "
Bank of America analyst Wamsi Mohan said: "According to Apple's earnings forecast, we estimate that iPhone shipments in the second quarter of the fiscal year will be about 41 million units. Apple may have a resounding repercussion, although the Investors can pay attention to services. Changes in revenue and profit margins. "
UBS analyst Tim Arcuri raised the target price from $ 180 to $ 185 and said, "Apple's recent stock price should have a positive response because the outlook for profit is better than originally forecast. The worst news is over, the time is up. "
Bernstein analyst Toni Sacconaghi commented, "We were surprised by Apple's performance after the market. Stocks rose more than 5%. As net earnings per share are expected to fall 5%, this means that Apple's current price is smaller than yesterday ". The daily increase was over 10%, which was higher than Apple's relative 5-year relative to the PE (P / FE) and EV / FCF (Average Company Value / P / E) ratio. "
Sacconaghi warned: "By 2020, it will increase by 8 percent." The annual growth rate will be 14 percent from 2015 to 2017. Apple's installed base growth rate seems to have slowed last year, which will become the main service business, "said Apple's new release. The Need for Service ".
Citi analyst Jim Suva also mentioned: "Apple is a service company? No … Apple is an IT hardware company that provides quality services related to Apple products. difficult to exist if Apple's service will grow more than 50% in the coming years and will still account for less than 25% of total sales. "
For Apple's stock rating, 2 of the 8 investment banks recommended an increase, 2 suggested buying, 1 remained stable and 2 were neutral.
- Morgan Stanley – "Overweight" rating, target price up to $ 197
- JP Morgan Chase – rating "overweight"
- Citi – Buy a rating with a target price of $ 170
- UBS (Buy) with a target price of $ 185
- Bernstein – classification "Market performance"
- Bank of America – Neutral Rating
- Goldman Sachs – Neutral Rating
- Wells Fargo – rating "Neutral"