Apple (AAPL) Results 'Solid', Susquehanna Says

Susquehanna analyst Chris Caso maintained a Positive rating and $155 price target on Apple (NASDAQ: AAPL), calling last night's report "solid" despite the 7% sell-off in the stock.

Caso commented, "AAPL reported what we consider to be a solid report, though some elements were below the more bullish estimates (ours included). Although there are many moving parts that we discuss more fully in our note, our view is that iPhone performed about in line with expectations from the start of the quarter, though expectations had become more bullish as the quarter progressed. We think Apple Watch expectations had also gotten too high, further contributing to the variance vs. expectations. But we don’t think this report at all suggests a problem with Apple or iPhone. Our 2H iPhone and our C16 EPS estimates remain unchanged after the report. With $10 in earnings power in sight, plus a call option on incremental new products, we think the stock can trade in excess of $150 once investors become comfortable that AAPL can continue to grow despite the tough compares following iPhone 6’s success. Given AAPL’s commentary that only 27% of AAPL’s legacy user base has upgraded as of yet, coupled with remarkable emerging market growth, we think that provides a good risk/reward at current levels."

The firm's eptember-quarter estimates move to $50.09 bln/$1.80, from $50.5 bln/$1.86 previously. C15 estimates move to $233.9 bln/$9.22, from $236.1 bln/$9.35. C16 estimates move to $256.5 bln/$9.97, from $257.2 bln/$9.97.

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 $130.75 yesterday.

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