As reported last night, despite a kneejerk spike higher in AAPL shares, the stock ultimately faded the release of its Q4 earnings which had a mix of positive and negative components, however the market ultimately focused on the latest revenue and ASP miss and the projected margin decline and glossed over Tim Cook’s exuberant revenue forecast for 2016, pushing the stock lower by nearly 3% this morning.
So, having had a chance to digest the results, Wall Street’s sellside analysts chimed in, and the prevailing sentiment was neutral to negative, with Stifel’s Aaron Raker most disappointed, downgrading the stock from Buy to Hold, and lowering his price target to $115.
ANALYST COMMENTARY STIFEL (Aaron Rakers)
- Downgrades to hold from buy, lowers PT to $115 from $130
- Says Apple stock is likely to remain “range-bound” for next two-three quarters until investors gain greater insight into potential fundamental upside drivers
WELLS FARGO (Maynard Um)
- Says 1Q gross margin guidance of 38%-38.5% (vs 38% in FQ4) was disappointing; notes FX had a 50bps impact
- Management commentary aligns w/Wells Fargo view that units per carrier are higher in non-S cycles (this yr) and lower in S-cycles (next yr)
- May create some headwinds in next year’s cycle, weigh on margins
Rates market perform
JPMORGAN (Rod Hall)
- JPM continues to be cautious on consumer demand into early 2017
- Expects better trends in H2’17 on increased shareholder returns and stronger replacements
- Says co. FY1Q rev. view implies 76m iPhone units sold into channel; being driven by Samsung Note 7 problems and extra week in qtr
- Rates overweight, raises PT to $114 from $107
BARCLAYS (Mark Moskowitz)
- Interprets management commentary on iPhone 7 plus demand likely outstripping supply in Dec. qtr as “affirmation of the near term lift to the iPhone business”
- Says investors should “wait for the dust to settle in coming days”; says momentum-focused investors may trim/exit positions
- Longer term, more positive on stock based on Android issues, extra week in Dec. qtr and better iPhone units and ASPs
- Rates overweight, raises PT to $119 from $114
WILLIAM BLAIR (Anil Doradla)
- Says component shortages during the qtr. may have muted share shift trends from Samsung to Apple
- ‘‘Impressed’’ by the strong growth in FY4Q services segment (up 24.4% y/y)
- Gross margin guidance miss was driven partially by FX; management notes 340 basis point headwind from stronger U.S. dollar
- Rates outperform
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