Market Overview

3 Areas To Watch In Apple's Upcoming Earnings Report

3 Areas To Watch In Apple's Upcoming Earnings Report

Apple Inc. (NASDAQ: AAPL) is scheduled to report its fiscal first quarter results Feb. 1 and expectations are high for the iPhone maker after the stock's nearly 50 percent return over the past year.

The Analyst

Wells Fargo's Aaron Rakers maintains a Market Weight rating on Apple's stock with an unchanged $195 price target.

The Thesis

Apple is likely to earn $3.80 per share on revenue of $86.5 billion, Rakers said in a note. This estimate is in-line with Apple's own guidance of earning $3.59 to $3.83 per share on revenue of $84 to $87 billion and is also in-line with the Street's estimate. Apple is likely to say that it shipped 81.1 million iPhone units (up 4 percent year-over-year but up over 11 percent on like-to-like basis) with a blended average selling price (ASP) of $760.

Beyond the headline numbers, there are three areas of focus investors should be paying attention to, according to Rakers.

  1. Investors shouldn't expect a surprise to the upside in terms of iPhone shipments as the current upgrade cycle is seeing "muted upgrade trends" in mature markets, especially in China where the overall smartphone market is seeing "weak" data points.
  2. Apple's announcement it will pay $38 billion in taxes related to repatriating offshore capital has many investors thinking what impact this will have on its capital return policy, Rakers said. Apple's management could outline a revised plan which includes a 30 percent dividend increase (versus an 11 percent average increase over the past four years) and an incremental $70 billion to its share repurchase program.
  3. Apple is expected to report "strong" growth in its services business and could exceed Wall Street's estimate of $8.6 billion, or 20 percent year-over-year growth.

Price Action

Shares of Apple recently traded around $177.27, up 4.7 percent in the early going of 2018.

Related Links:

Longbow Downgrades Apple, Newest iPhone Cycle Is Merely 'Good, Not Great'

For Apple, Good News Out Of China Keeps Morgan Stanley's Bullish Stance Intact

Latest Ratings for AAPL

Sep 2020Raymond JamesMaintainsOutperform
Sep 2020CitigroupMaintainsBuy
Sep 2020JefferiesMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings


Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: Aaron Rakers Apple China Apple ServicesAnalyst Color Previews Top Stories Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

JBLRBC CapitalMaintains38.0
COSTRBC CapitalMaintains412.0
COSTMKM PartnersMaintains325.0
MTNTruist SecuritiesMaintains243.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at