Apple Analysts Dish Their Thoughts On Earnings

• Shares of Apple Inc. AAPL were trading higher by 1.68 percent at $116.48 early Wednesday morning.
• The company reported upbeat results in its fourth quarter (September ending) print.
• Wall Street analysts remained mostly bullish.

Shares of Apple were highly volatile ahead of the release of its fourth quarter (September ending) results Tuesday afternoon. Shares eventually settled into positive territory and were trading higher by more than 1.50 percent during Wednesday's pre-market session. Here is a roundup of what some of Wall Street's top analysts were saying after the print. Morgan Stanley: iPhone Remains ‘Name Of The Game' Katy Huberty of Morgan Stanley commented in a note that Apple's results show that all geographic regions saw "strong" iPhone demand. Europe revenue grew 18 percent year over year (constant currency), Japan saw a 29 percent jump (constant currency) year over year, Asia Pacific showed a 49 percent year over year growth (constant currency) while China was a "stand-out" at 99 percent growth (constant currency) given a 120 percent iPhone unit growth year over year. Huberty continued that Apple's first quarter (December ending) guidance was "better than expected" and implies iPhone unit and revenue growth on the back of: 1) strength in China and other emerging markets, 2) a continued upgrade cycle, 3) record Android share gains, and 4) average selling price uplift. Finally, the analyst pointed out that her own data indicates Chinese users continue shifting to "better" smartphones and more US users plan to upgrade this year than last year which should help the company gain share in the smartphone market. Shares remain Overweight rated with a price target lowered to $152 from a previous $162. FBR: ‘Better Than Feared' Results Daniel Ives of FBR & Co. commented in a note that investors were "bracing for the worst and hoping for the best." Ultimately, the company delivered a "B+ quarter" and a better than feared guidance. Ives continued that Apple's results only included two days of the iPhone 6s launch and the company's December quarter guidance was more important. The analyst noted that the guidance was "generally in-line" with Street expectations and "defied bear calls for a softer outlook." Ives added that Apple's guidance implies year-over-year iPhone unit growth which should prove to be a "major step in turning the positive tide" around Apple's investment thesis. While the analyst did acknowledge that there will still be concerns surrounding full year fiscal 2016 growth during the 6S cycle, he suggested that Tuesday's report "proves yet again how much fuel is left in the iPhone engine." Shares remain Outperform rated with an unchanged $175 price target. Pacific Crest: Growth Should Reaccelerate Andy Hargreaves of Pacific Crest commented in a note that Apple's P/E multiple has compressed 12 percent since July and more than 20 percent year to date. The analyst suggested the reason behind this is an expectation for "stagnant growth" during the 6S cycle. Hargreaves continued that Apple's guidance resulted in a revised December quarter iPhone unit estimate to 75.9 million from 66.9 million. Beyond the December quarter, March remains a "risk" but the analyst is expecting revenue and earnings per share growth to accelerate beyond and into the eventual iPhone 7 cycle. The analyst also argued that the smartphone is the "most important consumer product ever" and Apple should be viewed as a "sustained share gainer" that will support a long-term unit growth and profit expansion. Shares were upgraded to Overweight from Sector Weight with a newly established $142 price target. Brean Capital: Gross Margin Upside ‘Remains WELL Intact' Ananda Baruah of Brean Capital commented in a note that he left Apple's post-earnings conference call with "increased conviction" in his ongoing gross margin upside thesis and suggested the company could generate $3.35 or more per share in the December quarter – versus an implied guidance of $3.15 and the Street's estimate of $3.22 heading into Tuesday's print. Baruah continued that he "wouldn't be surprised" if Apple's December quarter shows a gross margin above 41 percent (versus the guided 39 to 40 percent range). The analyst added that the gross margin on iPhone units could approach the 47 to 48 percent range. Looking forward, Baruah suggested that the Street's numbers are "materially low" through 2017 and the company will deliver "material" earnings per share upside over the coming quarters. Shares remain Buy rated with an unchanged $170 price target. Elsewhere On The Street Analysts at Barclays maintained an Overweight rating with a price target raised to $155 from a previous $150. Analysts at BMO Capital Markets maintained an Outperform rating with an unchanged $145 price target. Analysts at Credit Suisse maintained an Outperform rating with a price target lowered to $140 from a previous $145. Analysts at Drexel Hamilton maintained a Buy rating with an unchanged $200 price target.