Apple (AAPL) PT Lifted to $130 at FBN Securities

FBN Securities analyst Shebly Seyrafi reiterated an Outperform rating and boosted his price target on Apple (NASDAQ: AAPL) to $130.00 (from $115.00) following strong Q4 results and guidance.

Seyrafi commented, "The company reported a nice revenue and EPS beat driven by strength in iPhone shipments (39.3M, up 16% Y/Y and 5% above consensus) driven by strong initial shipments of the iPhone 6/6+ (which became available in many countries including the US on Sept. 19) and by better than expected MAC and iPod results offset by weaker than expected shipments of iPads in front of its recent release of iPad products (iPad Air 2 and iPad mini 3). GM of 38.0% came in line with consensus (38%) and guidance (37-38%) but R&D came in below our expectations, allowing the company to beat on operating margin (26.5% vs. 26.0% consensus). Revenue growth of 12.4% Y/Y is an improvement from single digit Y/Y growth rates over the past five quarters, and growth was in the double-digits even adjusting for channel-fill. iPhone channel inventory grew by less than 1M units Q/Q while iPad channel inventory fell by ~500K Q/Q, resulting in a net channel fill benefit to reported revenue growth of ~1pp, so sell-through revenue growth was around 11.4% Y/Y, we estimate."

He added, "The key concerns in the report were the weak iPad growth (revenue down 14% Y/Y with units down 13% Y/Y as reported and down 9% Y/Y on a sell-out basis as iPad channel inventory declined by 500K Q/Q). We think that the new iPad Air 2 and iPad mini 3 released last week will help going forward, but these releases will not arrest the decline in FQ1, we believe, as larger iPhones are cannibalizing iPads and as competition from Android tablets increases. Still, we could not help but be impressed by the company’s positive tone on the call as the company was selling “everything it could make” and as the iPhone 6+ was supply constrained in FQ4 but should become more available in FQ1. AAPL is now at the beginning of a very strong iPhone 6/6+ cycle."

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 $99.76 yesterday.

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