A messenger service representative will work with customers at Apple’s store as customers return to buy-in after Los Angeles County relaxed restrictions at places like the Beverly Center in Beverly Hills on Oct. 8 2020.
Genaro Molina | Amannan Los Angeles | Getty Images
Apple is expected to report its earnings in the first fiscal quarter of 2021 on Wednesday, and analysts ’expectations are bullish.
The company failed to attract investors in its fourth quarter, which ended on September 26, 2020, due to weak iPhone sales. But the weakness seemed to be due to people waiting for the new iPhone 12, which was not sold until October.
Wednesday’s earnings report marks the first full season since Apple released its new line of iPhones and membership services packages.
The company’s stock was up about 1% in pre-sale, amid broader market gains.
Here’s what analysts say about the stock:
Morgan Stanley Research
Morgan Stanley analysts said in a note Thursday that they expect the December quarter to be highest.
“Our recent discussions suggest that investors expect Apple to release hard, but not good, results in December. We disagree and believe that it is likely that Apple will report full-time quarterly revenue and earnings, “analysts wrote, raising their price target to $ 152 from $ 144.” In our opinion, the iPhone 12 is the product Apple ‘s most successful in the last 5 years. “
The company highlighted strength across Apple’s product and service package, led by 5G adoption, ongoing remote work and learning and maintaining App Store communications. Analysts said they expect double-digit year-over-year growth for Apple’s five revenue divisions in the December quarter.
“Overall, our December quarter revenue of $ 108.2B is 5% above consensus (we are ahead of consensus in all sectors except Services), while our EPS of $ 1.50 7% above consensus, “they said. “We expect demand strength to continue and our FY21 revenue and EPS estimates are both 5% above consensus.”
DA Davidson
The company said in a note Thursday to clients that it thinks the stock is “looking tasty,” and revised its price target of $ 133.
“As we have said before, we believe that Apple’s first line of smartphones on 5G networks is in a better position than investors fully value for the following reasons: 1 ) behavior support, 2) favorable discretionary income, and 3) 1B distance learning and 1B distance learning. Further, we are adding the recent strength in shares for investors warming to this idea, ”wrote DA Davidson analyst Tom Forte.
The company said it will take into account iPhone sales trends, perceptions of privacy and advertising, and the potential impact of the new Biden administration.
“We project a sales to increase 15.7% to $ 106,236M, which is above the consensus forecast of $ 102,563M,” the company said. “Note, Apple did not provide formal guidance, but expected double-digit growth for all iPhone product expectation segments, which it expects single-digit growth. On profit, we estimate $ 33,525M of EBITDA (for a margin of 31.6%), which is above the consensus figure of $ 31,763M Finally, we are projecting a GAAP EPS of $ 1.52, compared to the consensus estimate of $ 1.40. “
AB Bernstein
The company expects Apple to post strong iPhone sales, but said there is little surprise given the apparently strong iPhone 12 cycle. Analysts, including Toni Sacconaghi, raised their first-quarter EPS estimates to $ 1.53 and FY21 EPS to $ 4.26 due to higher iPhone ASPs, a weaker U.S. dollar and strong Mac / iPad sales.
“While our estimates are above consensus, we believe our numbers are broadly in line with buyside expectations,” analysts wrote on Thursday. past ‘directions’ rather than ‘guidelines’ for Q2, but they are above consensus, probably due to a cashback, and we expect to be moderately stronger than normal season due to the release time of the iPhone 12. “
The company said it would heed Apple’s comments about the benefits of smartphone share, ongoing regulatory concerns, and the adoption and advertising of Apple’s new services, but said Apple needs something more to be better than expected.
“AAPL has had a tremendous run, trading with large technical firms with higher growth rates. At 33x a consensus of 21 EPS, and buyside side expectations above the streets, we are struggling with an issue see for better performance in AAPL, absent with an amazing product release, or migrate to a bundled hardware membership model, “wrote.
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