Goldman Sachs Is Uber-Bullish Into and After Apple's (AAPL) Q2 Print

Goldman Sachs analyst Simona Jankowski reiterated her Conviction Buy rating and $155 price target on Apple (NASDAQ: AAPL), highlighting the company is entering an upward estimate revision cycle. Jankowski expects Street estimates to move higher for the first time in 6 months off the 04/25 print and into the iPhone 7 launch in the fall.

Committing on expectations for Q2 results on April 25, the analyst said she expects a "beat and raise quarter", with revenues of $54.4 billion(versus the consensus at $52.0 billion and guidance of $50-53 billion) and EPS of $2.17 (versus consensus at $2.00). The firm's above-consensus view is driven by iPhone units, which they model at 53.6 million versus consensus at 50.0 million. They expect Apple to guide F3Q revenues to $46.5-48.5 bilion accounting for its typical conservatism, versus the consensus at $50.4/$47.6 billion. The firm's June quarter iPhone unit estimate is at 47 million versus the consensus at 44 million.

More importantly, as the analyst points out, is their survey which points to extremely strong pent-up demand for the iPhone 7. 44% of respondents indicating that that they plan to buy the iPhone 7 in the fall.

"This implies a shortening of the replacement cycle, as a third of upgrades are expected to come from current generation (<1 year old) iPhones," Jankowski said. "In addition, it reflects a high number of iPhone 7 sales to switchers (near 25%) from other platforms such as Android, suggesting that Apple will continue to gain share."

The analyst also expects Apple to increase its capital return program by $50 billion to a cumulative total of $250 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 $109.02 yesterday.

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