Apple (AAPL): Path To $10 In Earnings Remains - RBC
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RBC Capital analyst, Amit Daryanani, reiterated his Outperform rating on shares of Apple (NASDAQ: AAPL) after the company reported in-line Sept-qtr results with revenues/EPS of $46.9B/$1.67 vs. Street at $47.0B/$1.66.
The analyst believes the sell-off creates an attractive entry point for investors with fundamentals largely intact and AAPL having left room for upside in the Dec-qtr. AAPL guided for modest upside to December revenue ($76-78B vs. Street at ~$75B) but Dec gross margin outlook (38-38.5%) and implied EPS guide of ~$3.15 at the midpoints were slightly below expectations.
iPhone units came in at 45.5M (while AAPL increased channel inventory by 2.5M) and the guide implies iPhone units improving by ~60-70% q/q to ~74-77M range for Dec-qtr and ASPs should improve materially in Dec-qtr (improved mix). Overall, we think results/guide mark a solid start to what we think will be a stable iPhone 7/7+ cycle.
price target of $125.00
Shares of Apple closed at $118.25 yesterday.
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