Bernstein Says Apple's (AAPL) Valuation Remains Attractive Amid Recent Run, But Sees One Possible Near-Term Risk
- Wall Street hits new high as post-election rally roars ahead
- ECB to scale back asset buys as it extends to end-2017
- lululemon athletica (LULU) Tops Q3 EPS by 4c; Adj.-Comps Outpaced Views
- Oil rises above $50 despite doubts over OPEC output cut
- Pre-Open Stock Movers 12/08: (VYGR) (TLRD) (LULU) Higher; (OHRP) (VRNT) (CMTL) Lower (more...)
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
Bernstein affirms Apple (Nasdaq: AAPL) at Outperform with a price target of $125, and asked whether or not recent momentum in the stock can continue.
Analyst Toni Sacconaghi noted that Apple's valuation remains attractive versus peers, despite the recent run.
We believe that current quarter (September, FYQ4 16) estimates are achievable, and Apple will benefit from a 14-week quarter in FYQ1, which will likely enable it to hit current December estimates as well, even if the iPhone 7 cycle is muted. Consensus appears to be modeling a 5% decline for iPhones in the September quarter, below normal seasonality, and only 51% seq growth in December (adjusting for the 14 week qtr), lowest in the last five years.
While March quarter and FY 17 estimates may be more aggressive, investors are likely to look past any downward revisions post the December quarter, and focus on the iPhone 7S/8 that will be launched in mid to late 2017, which is expected to be a significant upgrade.
We see the biggest risk to near-term momentum being very weak December guidance (implied iPhone unit growth of 70M or less). This would point to iPhone units for FY17 of only 200M and EPS of around $8, both likely below buyside expectations, and would raise structural concerns beyond simply a weak current iPhone cycle.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- OTR Global Downgrades Apple (AAPL) to Mixed
- MKM Partners Raises Price Target on Ollie's Bargain Outlet (OLLI) Following 3Q
- BMO Capital Reiterates Outperform on Costco Wholesale (COST) Following 1Q Report
Create E-mail Alert Related CategoriesAnalyst Comments
Related EntitiesSanford C. Bernstein, Toni Sacconaghi
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!