Market Overview

Apple Can 'Grow Again' Next Quarter

Share:
Apple Can 'Grow Again' Next Quarter

Following solid Q4 2016 results and Q1 guidance, Drexel Hamilton’s Brian White believes Apple Inc. (NASDAQ: AAPL) could return to sales growth a quarter earlier than estimated.

White maintained a Buy rating on the company, with a price target of $185.

“Apple remains our top pick for H2:2016 given our view that the sales, profit and iPhone cycle have bottomed, while valuation remains depressed and we expect the iPhone 7 cycle will return the iPhone franchise to growth,” the analyst mentioned.

Solid Q3

The company reported its Q4 sales at $46.85 billion and pro forma EPS at $1.67, both metrics coming in ahead of the estimates, with EPS beating guidance as well.

Gross margins for the quarter were slightly ahead of estimates at 38 percent, while operating margins of 25.1 percent also beat estimates.

Apple reported beat operating profit of $11.76 billion, with operating cash flow of $16.1 billion.

iPhone units stood at 45.5 million for Q4, ahead of the estimate of 44.05 million, representing a 5 percent year-on-year decline but an improvement over Q3 2016.

Q1 Guidance

“In our view, Apple's 1Q:FY17 outlook is strong with sales growth expected to return a quarter sooner than expected and a very positive sign with the iPhone 7 ramp,” White stated.

Apple guided to sales of $76-$78 billion for Q1, above the consensus and the estimate, with gross margin guidance of 38.0-38.5 percent.

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2020Morgan StanleyMaintainsOverweight
Apr 2020Credit SuisseMaintainsNeutral
Mar 2020UBSMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

 

Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: Brian White Drexel HamiltonAnalyst Color Long Ideas Reiteration Analyst Ratings Tech Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
PECFRAMaintains8.0
HUNCFRAUpgrades16.0
CCCFRADowngrades11.0
VOYAPiper SandlerMaintains58.0
PRUPiper SandlerMaintains64.0
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.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
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 vipaccounts@benzinga.com