Apple (AAPL) Stock Soars on Another Robust Quarter Fueled by Monster iPhone and Services Numbers, Analysts Raise PTs

January 28, 2022 5:02 AM EST
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Price: $137.35 -2.46%

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    44 Buy, 19 Hold, 4 Sell

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Shares of Apple (NASDAQ: AAPL) are up 3% in pre-market Friday after the Cupertino-based tech titan delivered another strong beat across the board.

Apple reported EPS of $2.10, compared to the consensus estimate of $1.89 and up 25% on an annual basis. Revenue came in at $123.9 billion, beating the $118.66 billion consensus and up 11% year-over-year.

Apple beat analyst consensus in all of the product categories for the quarter that ended December 25, except iPad. iPhone revenue stood at $71.63 billion, vs $68.34 billion consensus, up 9% YOY. Services generated $19.52 billion, compared to $18.61 consensus and up 24% YOY.

Other products generated $14.70 billion in revenue, vs analyst consensus of $14.59 billion and up 13% YOY. Mac revenue was $10.85 billion, beating the consensus of $9.52 billion, and up 25% YOY. iPad revenue came in at $7.25 billion, falling short of. $8.18 billion consensus, and down 14% YOY.

Apple reported a gross margin of 43.8% for the period, beating the analyst consensus 41.7%.

Tim Cook, CEO of Apple, said the company has also managed to ease its supply chain challenges, contributing to the rise in Apple’s stock price.

Apple did not disclose official guidance for the current quarter, however, Cook has recently provided a forward-looking data point.

“What we expect for the March quarter is solid year-over-year revenue growth,” he said. “And we expect supply constraints in the March quarter to be less than they were in the December quarter.”

Wedbush analyst Daniel Ives praised Apple for delivering another robust quarter. He sees these results as "calming words heard around the tech world and much needed good news in what has been a market storm.”

“While the supply chains issues have curtailed some growth for Apple on this massive product cycle playing out across its entire hardware ecosystem, we believe the pent-up demand story for Cupertino is still being underestimated by investors with chip issues a somewhat transitory issue in our opinion. With ASPs continuing to be very positive on Pro/ Pro Max and as of today roughly 250 million of 975 million iPhones worldwide not upgrading in 3.5 years,we focus on the demand front and do not view the supply chain issues as crashing the iPhone growth story in 2022 despite many yelling fire in a crowded theater in this white knuckle market,” Ives said in a client note.

Oppenheimer analyst Martin Yang raised the price target on Apple to $190.00 per share from the prior $170.00 as he believes share gains won’t stop here.

“Apple is still gaining new customers at impressive pace, with 6 out of 10 MacBook buyers in China, 1/2 iPad, and 2/3 Watch buyers new to devices. Those new users will likely purchase more devices in the Apple ecosystem and contribute sustainable growth to Apple's active installed base,” Yang wrote in his report.

Several other Street analysts have also raised their price targets on Apple following yesterday’s earnings report.

Apple stock price closed at $159.22 yesterday.

By Senad Karaahmetovic | [email protected]



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