Goldman Lifts Price Target on Apple (AAPL) into Q1 Results; Solid Read Bolsters Confidence

January 22, 2014 7:20 AM EST Send to a Friend
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(Updated - January 22, 2014 9:21 AM EST)

Goldman Sachs maintains its Buy rating and raises its price target from $620 up to $635 on Apple, Inc. (Nasdaq: AAPL) heading into the company's FQ114 report, which is slated for January 27th, after the close of trading.

Analyst Bill Shope sees revenue of $58.54 billion and EPS of $14.29, up from previous estimates of $57.28 billion and $14.09, respectively.

Shope commented that the improved outlook stems from a better-than-expected iPhone 5c, 5s mix and iPad Air vs. mini mix. Key areas of focus into the tape include:
  1. Apple’s gross margin performance in the December quarter and guidance for the March quarter, as this will provide some indication of the cost improvements the company is seeing as it ramps the latest iOS devices;

  2. Revenue guidance and any indication of how China Mobile is muting normal March quarter seasonality; and

  3. Apple’s commentary on how it expects product mix to trend in early 2014, and whether this will pressure ASPs.
Gross margin in the December quarter should be about 37.3 percent, according to Shope.

UPDATED - (A prior version incorrectly had revenue estimates. The following is the correct data): Unit estimates for FQ114 include iPhone shipments of 55.667 million, iPads of 26.400 million, Macs of 4.406 million, and iPods of 8.241.

For the March quarter, Shope is looking for revs of $45.92 billion and EPS of $11, bolstered by confidence from the China Mobile (NYSE: CHL) iPhone launch on January 17th.

Looking to fiscal 2014, Shope raises estimates from revs of $185.2 billion and EPS of $45.19 up to revenue of $188.14 billion and EPS of $45.81.

Meanwhile, FY2015 revenue and EPS go to $218.63 billion and $54.82 from $207.78 billion and $51.58; our FY2016 revenue and EPS estimates are now $244.63 billion and $63.39 versus $227.26 billion and $58.77 previously, Shope commented.

For an analyst ratings summary and ratings history on Apple, click here. For more ratings news on the Company, click here.

Apple closed at $549.07 yesterday, with a 52 week range of $385.10 - $575.14.


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Comments

huh?
Jim Alvrus on 2014-01-22 07:55:13
Mark as Spam | Reply to this comment

Only 32 million iPhones??? I think that is a sell!!! Maybe the author pulled something from 2011? The iPad number is way low too.


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