Bernstein's Sacconaghi Previews Apple (AAPL) Q2; Raises Est, PT and Sees Large Capital Return Plan

Bernstein analyst Toni Sacconaghi previewed next week's earnings (04/27) for Apple (NASDAQ: AAPL) and in doing so raised estimates and his price target to $142.00 (from $135.00).

Sacconaghi is raising estimates and expects that Apple will report FY Q2 revenue of $56.5B vs. consensus at $55.9B (and guidance of $53.5B) and EPS of $2.17 versus consensus at $2.15 and an implied guidance midpoint of ~$2.00.

The analyst forecast that Apple shipped 59.6M iPhones in the quarter, including a channel build of 1M units.

They estimate gross margins of 39.8%, at the high-end of Apple's guidance range of 38.5%-39.5%, and forecast 15.0 mil. iPads and 4.7 mil. Macs sold.

Sacconaghi also believes that Apple is likely to meaningfully increase its dividend (perhaps by 20% or more) and introduce an incremental share repurchase program of $80B+ through the end of CY 2017.

On currency, the firm's analysis suggests that the incremental revenue and gross margin impact to Q2 (relative to when Apple provided guidance) is not material – moreover, the estimated sequential impact from currency to FY Q3 is also modest.

The firm maintained an Outperform rating on the stock.

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 $129.67 yesterday.

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