Apple Q1 Earnings Preview

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Apple Inc. AAPL will report fiscal Q1 earnings after the market close on Tuesday. The Street expects revenue to come in at $67.69 billion with EPS of $2.60.

Wells Fargo analyst Maynard Um raised the firm’s estimates above consensus on Monday to $69.1 billion in revenue with EPS of $2.77.

Maynard commented, “While we expect a strong result and outlook from Apple, we believe these are known and worry about tougher compares, lack of new large carriers to add, increasing challenges to differentiate the next cycle, and questions about memory strategy on mix.” The firm maintained a Market Perform rating and raised its valuation range from $92-$102 to $100-$110.

Nomura analyst Stuart Jeffrey felt that sales driven by iPhone replacements rather than Android “conquests” may disappoint investors. “Without conquest sales...we expect to see slowing growth in FY16E weigh on the stock later this year.”

Jeffrey estimated Q1 revenues at $66.6 billion and EPS at $2.53. The firm maintained a Neutral rating on the stock.

Morgan Stanley analyst Katy Huberty cited Apple as a “Best Idea” and rated the stock Overweight with a $126 price target. Huberty’s base case for fiscal 2015 saw EPS of $8.40, above consensus of $7.86.

Apple can grow revenue and EPS at a single digit pace and “has the opportunity to take share in slower-growth smartphone and tablet markets with larger screens and new services. New product categories like Watch, and services like Apple Pay could further boost growth,” according to Huberty.

Over the past month Apple stock has traded in a range between $114 and $105.

Heading into the earnings report, the stock is up 6.71 percent since January 20 and recently traded at $112.46.

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Posted In: Analyst ColorAnalyst RatingsKaty HubertyMaynard UmMorgan StanleyNomuraStuart JeffreyWells Fargo
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