With Likely Higher Guidance and Shareholder Returns, Apple (AAPL) Has an 'Attractive Set-Up' Into Earnings - Morgan Stanley

Morgan Stanley analyst Katy Huberty reiterated an Overweight rating and $298 price target on Apple (NASDAQ: AAPL), saying she sees an attractive set-up into Q2 earnings on April 30. Huberty expects a better-than-expected F3Q revenue guide and higher shareholder returns, in the form of buybacks and dividends, due to the company's strong balance sheet.

Huberty said the March quarter will largely be a "non-factor", ...with June quarter guidance likely to outperform their below consensus forecasts. "While there is a small risk that Apple does not guide for the June quarter, we believe the more likely outcome is that Apple guides to a wider range than typical, and recent data gives us confidence that the midpoint of management's revenue guidance range is likely to beat our forecast of $46.7B (vs. consensus of $51.4B)," Hubert commented.

Further, the analyst expects Apple to raise buyback authorization by at least $75B, and a mid-to-high single-digit percentage dividend increase. "... we expect that Apple will remain aggressive in returning cash to shareholders (skewed to buybacks) and believe management will announce at least $75B in additional buyback authorization (on top of the prior $175B in authorization, of which we estimate ~$25B remains), and a mid-single digit percentage increase to
their annual dividend."

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 $275.03 yesterday.

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