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Apple (AAPL) Q3 Results 'Very Good' Versus 'Great' Expectations, BMO Capital Says

July 22, 2015 6:48 AM EDT
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Price: $171.48 -1.06%

Rating Summary:
    39 Buy, 25 Hold, 7 Sell

Rating Trend: = Flat

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BMO Capital analyst Keith Bachman reiterated an Outperform rating and $145 price target on Apple (NASDAQ: AAPL) following what they called "very good results" against high expectations. Bachman. They believe that buy-side expectations for iPhones were 50-52 million. The firm's published iPhone estimate for the June quarter was 48 million units, but to be fair, they thought upside tension existed to 50 million.

Bachman commented, "Hence, the stock will need to retreat some in the near-term despite the Apple story remaining compelling. In the June 2015 quarter, iPhone units declined by 22% q/q. In the June 2013 and 2014 quarters, iPhone units declined by an average of 18% q/q. However, December 2014 and March 2015 quarters unit growth on an absolute basis was much stronger than past years. Finally, we believe that implied Watch growth was disappointing, with our math suggesting about 2.3 million units in the June quarter."

The firm is raising FY15 EPS estimate to $9.14 from $9.01, and raising FY16 EPS estimate to $9.83 from $9.75. They are raising our FY16 FCF estimate to $71 billion from $66 billion.

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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