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Apple LONG

by SignalFactory   ·  July 30, 2020 | 11:25:29 UTC  

Apple LONG

by SignalFactory   ·  July 30, 2020 | 11:25:29 UTC  

Apple Inc, (NASDAQ: AAPL) the world’s largest technology company by revenue, could outperform it’s second-quarter earnings result consensus estimates on the back of better-than-expected hardware sell-in, according to Morgan Stanley analysts, who also forecast revenue and EPS of $55.1 billion and $2.18, respectively.

The California-based technology giant will release its second-quarter earnings result on Thursday, July 30, after the market close.

“June quarter results likely to outperform consensus estimates on the back of better than expected hardware sell-in. We currently forecast June quarter revenue and EPS of $55.1B and $2.18, 7% and 8% above current consensus estimates, respectively, on the back of stronger than expected intra-quarter data points across nearly all Product segments. We currently forecast $24.1B and $4.9B of iPhone and iPad revenue, respectively, in the June quarter vs. consensus of $22.4B and $4.9B,” Katy L. Huberty, equity analyst at Morgan Stanley said.

“We currently forecast June quarter Services revenue of $13.4B (+16.7% Y/Y), 1% above the consensus estimate of $13.2B (+15% Y/Y) and nearly 5 points higher than our original June quarter Services forecast largely due to record results from the App Store, which we estimate grew 30% Y/Y in the June quarter, the fastest quarterly growth in 3 years, as consumers remained at home for much of the quarter,” Huberty added.

Apple had its price objective upped by stock analysts at Wells Fargo to $420 from $400. Canaccord Genuity raised the target price to $444 from $310; BofA Global Research raised price objective to $410 from $390 and Needham raised its target price to $450 from $350.

The global coronavirus health crisis has also encouraged investors to look into “high quality, safe investments.” Huberty says that has contributed to Apple’s strong performance and growth during the pandemic.

Apple did not guide for the June quarter, citing the ongoing health crisis. Huberty at Morgan Stanley expects the company to report revenue of $55.1 billion and earnings per share of $2.18. Huberty says that her expectations of stronger-than-expected intra-quarter data are derived from performance across Apple’s hardware segments. If accurate, those predictions are 7% and 8%, respectively, above current consensus.

Huberty forecasts $24.1 billion in iPhone revenue in the June quarter and $4.9 billion in iPad revenue. Mac shipments are estimated at $6.6 billion, and Morgan Stanley predicts Apple’s Wearables, Home and Accessories segment to bring in $6.1 billion in revenue.

Huberty also expects Services to strongly grow year-over-year, with the analyst forecasting revenue for the segment to be $13.4 billion. That is 16.7% growth compared to the previous year, and 5 points higher than Morgan Stanley’s original June quarter Services forecast.

The increase in Services revenue is attributed to record results from Apple’s App Store in the third quarter of 2020, which the analyst says grew 30% year-over-year.

Apple LONG (Buy)

ENTER AT: 384.13

T.P_1: 396.82

T.P_2: 414.43

S.L: 327.65

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