Apple And Microsoft's Strengths And Weaknesses Ahead Of Their Earnings - Analyst's Take

  • Rosenblatt shares its concerns and convictions over two significant U.S. Big Tech stocks ahead of their earnings results.
  • Rosenblatt analyst Barton Crockett's checks of industry data ahead of Apple Inc's AAPL 3Q22 earnings report reflect a company's out-performing peers, boding well in a challenging environment, suggesting his slightly above FactSet consensus estimates are beatable. 
  • Apple's big moves during the quarter in sports (deal to be the lead broadcaster of Major League Soccer, and reportedly in the lead to pick up Sunday NFL Ticket) seem brand-driven and disruptive, raising questions of how the economics work, which perhaps suggests confidence in Cupertino.
  • He had a Neutral rating with a price target of $168 on Apple.
  • Rosenblatt analyst Blair Abernethy marginally slashed his Microsoft Corp MSFT estimates due to Windows OEM headwinds and Euro decline and trimmed his target price to $330 (from $349) on higher interest rates and multiple comparable compression. He maintained a Buy rating. 
  • Abernethy believes enterprise IT spending, Digital Transformation activity, and the cloud shift remained strong in the quarter.
  • He expects FY22E revenue growth but believes forex could add further headwinds in FY23.
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