Goldman Is Still Buying Apple

• Shares of Apple Inc. AAPL have declined 13.64 percent over the past six months, from a high of $132.65 on April 27.
• Simona Jankowski of Goldman Sachs has reiterated a Buy rating on the company, while maintaining the price target at $163.
• The company has reported its F4Q sales and non-GAAP EPS ahead of the consensus and the estimates, while also guiding to F1Q sales ahead of expectations.

Analyst Simona Jankowski believes that the company has “cleared a key hurdle” with its F1Q guidance, given the concerns of a year-on-year decline. Apple expects iPhone units and revenues to be up year-on-year.

Related Link: 8 Apple Analysts Dish Their Thoughts On Earnings

Jankowski cautioned, however, that the company tends to “guide conservatively, with revenues being reported above the mid-point of the guidance by an average 8 percent for the last four quarters."

The company also disclosed that it had upgraded 31 percent of its installed base to the iPhone 6, as compared to 27 percent in the June quarter and 20 percent in the March quarter. “Based on that input, we estimate new users accounted for two-thirds of iPhone shipments,” Jankowski stated.

According to the Goldman Sach report, “Apple reduced the deferral of revenues for iOS devices and Macs by $5-10, which we estimate adds 40bps to CY16 gross margins,” while mentioning that any period of range-bound performance should be viewed as a buying opportunity.