Apple (AAPL) Earnings Preview: Wedbush and BofA Positive, Goldman Sachs 'Slightly Cautious'

January 25, 2022 10:53 AM EST
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Wall Street analysts are weighing in on Apple (NASDAQ: AAPL) as the Cupertino-based tech titan prepares to report earnings on Thursday after market close.

Dan Ives, Wedbush analyst, and a known Apple bull, believes Cook & Co. are due to deliver a beat amid robust iPhone 13 sales during a strong holiday season. The Street is calling for $118.3 billion in revenue and $1.88 EPS.

“The performance seen by Apple in the quarter was despite an unprecedented chip shortage out of the Asia supply chain, which ultimately pushed over 10 million iPhone units from the December quarter into the March quarter for Cupertino. Our iPhone 13 checks continue to be firm with our belief that Apple sold north of 40 million iPhones during the holiday season in a record number for Cupertino despite the chip shortage headwinds,” Ives wrote in a client note.

BofA analyst Wamsi Mohan reiterated a Buy rating and a $210.00 per share price target as he expects to see a strong December quarter from the company. The analyst sees strong iPhone 13 demand and Mac sales.

“We expect a strong F1Q on improved supply of higher end phones including the iPhone 13 series (although older models and iPads remained constrained). We raise our iPhone ests for F1Q from 79mn to 81mn, which is higher than Street at 80mn. However, our iPad ests remain at 13.69mn which is lower than Street est. of 17mn. Our rev/EPS for F1Q are $121bn/$1.90 vs. Street at $119bn/$1.91. Supply constraints had impacted Sep qtr rev by about $6bn, and Apple had guided for a larger negative impact in F1Q (which likely improved). We model GM of 41.6% which is at the low-end of guidance range 41.5- 42.5%, and vs. Street at 41.9%. Reit Buy on multiple tailwinds on both hardware (AR/VR- led iPhone upgrade cycle, new revenue stream from new products) and services side (acceleration in services, growth in users and average selling prices, and increased penetration of IB),” Mohan wrote in a memo.

On the other hand, Goldman Sachs analyst Rod Hall is “slightly cautious” on Apple, citing soft retail sales data as well as Chinese CAICT data. Hall is positive on the iPhone demand for the December quarter.

“While we believe Apple executed better than plan against supply constraints we believe both Services and potentially decelerating late quarter demand add risk to both the quarter and outlook commentary,” Hall said in the report sent to clients.

Apple stock price is down 1.3% today.

By Senad Karaahmetovic | [email protected]

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