Apple (AAPL) Quarter/Guidance Given 'B+' at FBR Capital
FBR Capital analyst Daniel Ives reiterated an Outperform rating and $175 price target on Apple (NASDAQ: AAPL) following better-than-feared results.
Ives commented, "Heading into last night's FY4Q15 (September) results, Apple investors were bracing for the worst and hoping for the best, and they ultimately received a B+ quarter/ guide that was better than feared, in our opinion. With September results only including two days of the iPhone 6s launch, all eyes were focused on the company's December guidance, which came in generally in line with the Street's outlook and defied bear calls for a softer outlook on chatter of mixed demand seen over the last month. With Cook & Co. forecasting year-over-year iPhone unit growth off Herculean comps in the December quarter with China remaining white hot, we believe last night was a major step in turning the positive tide around the Apple story. While there will continue to be worries around FY16 growth during this 6s product cycle as the "iPhone 6 hangover" thesis remains a lingering cloud over Cupertino's head, we believe this quarter and guidance proves yet again how much fuel is left in the iPhone engine and represents a pivotal inflection point for Apple. In sum, the bark was worse than the bite in terms of Apple's December guidance. We maintain our Outperform rating and $175 price target."
For F1Q16 (December), they are maintaining our total revenue of $77.0 billion while raising EPS estimate from $3.17 to $3.24, given the company's good gross margin outlook and continued share repurchases. For FY16, they are modestly lowering total revenue from $249.0 billion to $245.8 while raising EPS estimate from $9.67 to $9.80. They are also introducing our FY17 total revenue and pro forma EPS estimates of $261.2 billion and $10.93.
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Shares of Apple closed at $114.55 yesterday.