Goldman Sachs Previews Apple's (AAPL) Q2
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Goldman Sachs maintained a Buy rating on Apple (NASDAQ: AAPL) with a price target of $610.00. Analyst Bill Shope previewed Q2 results, scheduled for Wednesday after the close. He now forecasts revenues and EPS of $43.88 billion and $10.42, up from $43.85 billion/$10.30 primarily due to a lower share count.
"The key risk for the earnings release is a below-consensus June quarter guide, which would only partially be countered by the larger capital allocation program. With that said, we believe this risk is less pronounced than the deterioration we saw at this stage of the 2013 product cycle for three reasons: 1) we don’t expect this weakness to be coupled with gross margin erosion; 2) the China Mobile ramp is expected to gain momentum through 2014; and 3) revised carrier policies in 2013 artificially shifted some demand forward. The next key catalysts include WWDC in June, the iPhone 6 and new iPad production ramp, and new product categories and platform enhancements before year-end," said Shope.
"For the June quarter, we are modeling revenues and EPS of $37.5 billion/$8.92 (down from $39.72 billion/$9.38) versus consensus of $38.26 billion/$8.50. We also believe the company is likely to update its capital allocation program, with an increase of $30-35 billion for the authorization and a 10-15% increase in the dividend. We also adjust our earnings expectations for FY2014-FY2016, largely due to the factors discussed above," he added.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $524.94 yesterday.
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