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Apple Long

by SignalFactory   ·  January 27, 2021 | 12:43:54 UTC  

Apple Long

by SignalFactory   ·  January 27, 2021 | 12:43:54 UTC  

Apple is on track to report a bumper quarter, going by the iPhone sales trend. The company is scheduled to release its fiscal-year 2021 first-quarter results Wednesday after the market close.

Record Revenues, EPS in Sight: Analysts, on average, estimate Apple to report first-quarter earnings of $1.41 per share on revenues of $103.28 billion.

Loup Venture’s Gene Munster is above consensus, with the famed Apple analyst estimating 19% year-over-year revenue growth vis-à-vis the 16.70% growth Street is modeling.

The company’s revenues are expected to top the $100 billion mark for the first time in its history, with the iPhone strength supporting much of the upside.

Apple launched its newest iteration of the iPhone, dubbed the iPhone 12, late last year. The company had a delayed, as well as phased, the launch of the iPhone 12, which came in four variants. All four models are 5G enabled.

Other Metrics: iPhone builds in the quarter is estimated in the low-to-mid 90 million marks, Wedbush analyst Daniel Ives said in a note, citing supply chain estimates.

Munster sees the share of iPhone revenues to total revenues increasing to 59% in the first quarter from the typical 50% range. He expects iPhone revenues to increase 16% to $64.9 billion compared to the Street estimate of $59.4 billion.

Services revenue, which makes up 14% of sales, may have risen 18% year-over-year to $15 billion, the analyst estimates.

Munster expects Apple to have exited the December quarter with total cash of $185 billion, comprising $112 billion in debt and $73 billion in net cash.

Forward Outlook: For the March quarter, Apple is expected to report EPS of 91 cents on revenues of $74.54 billion. The consensus estimates for the fiscal year 2021 call for EPS of $4.03 on revenues of $318.9 billion.

Munster sees the accelerating digital transformation serving as a tailwind for Apple’s revenue growth for the next several years.

Ives said Apple has the potential to sell over 240 million units of iPhones in 2021, which could surpass the previous record of 231 million units set in the fiscal year 2015.

Apple Stock: Apple shares ended in 2020 with a gain of about 82% at $132.69. Having experienced some weakness at the start of the year, the stock has come back and is trading with a modest gain of 4.8% for the year-to-date period.

Apple valuation passed the $2 trillion mark in August, and if the company continues to execute at this pace, a $3 trillion market cap is on the horizon over the next 12 months.

Given the ongoing presence of social distancing initiatives, including working from home, it seems very plausible for both iPad and Mac to continue to see growth during the period. Wane is inevitable as the coronavirus-related purchase pattern slows, but given the ongoing pandemic, plus the holiday quarter, a dip is improbable for the January 27 results.

Morgan Stanley

On January 21, Morgan Stanley raised its price target for Apple from $144 to $152, on expectations of a strong quarter across the company’s entire portfolio. The forecast is for revenue of $108.2 billion, with an EPS of $1.50, both exceeding Morgan Stanley’s Wall Street consensus, as do the other figures.

For the iPhone, 78 million shipments are touted, with an ASP of $825 being up 8% year-on-year due to higher demand for the Pro models. Revenue from iPhone sales is said to be $63.9 billion, up 14% YoY.

Similar strength is expected for the iPad, Mac, and Wearables segments, with Mac, thought to be exceptionally strong due to the launch of Apple Silicon models. The Services arm will benefit from the App Store outperforming forecasts for the third consecutive quarter, with revenue of $14.84 billion anticipated.

Loup Ventures

Published on Saturday, the Loup Ventures Apple December Earnings Preview anticipates a 19% YoY growth in revenue to $109.5 billion, with an EPS up 13% to $1.42. This will apparently be driven by an “accelerating digital transformation” caused by people working and learning from home, which is forecast to continue for “the next several years.”

The iPhone results will be up 16% YoY in revenue to $64.9 billion, with nearly $8 billion in revenue pushed from the September quarter due to launch timings for the new models. The iPad segment will be up 35 at $8 billion for the quarter, representing 8% of Apple’s sales.

Mac revenue will jump a staggering 40% YoY to $10 billion, accentuated by the M1’s introduction. Wearables will be up 17% from last year, but the segment will have lagged as products like the Apple Watch are “viewed by consumers as non-essential” compared to other main items.

Services will continue growth, up 18% YoY at $15 billion.


Driven by 5G iPhone upgrades and strong holiday sales in Mac and iPad, Cowen reckons Apple will see total revenue of $104.5 billion for the quarter, with an EPS of $1.46. Its current price target for Apple is $153, up from $133.

Fieldwork on iPhone suggests there is an upward bias for the quarter, prompting the firm to raise its estimates to 77 million units from 72 million. Revenue is expected at $60 billion for the iPhone alone.

Services, buoyed by gaming and subscriptions, is thought to remain resilient and growing with the introduction of new offerings, including Apple Fitness+ and the One bundle. Revenue is tipped to be $16 billion, though attention will be paid to whatever Apple says about its TV production and content acquisition strategies, and the US DoJ’s antitrust investigation into Google’s TAC payments to Apple.


The quarter will be Apple’s first at over $100 billion in revenue, J.P.Morgan suggests, with revenue forecast at $110 billion and an EPS of $1.56. The firm’s generated consensus puts the same figures at $102 billion and $1.41, respectively.

Approximately 80 million iPhone units are forecast to be sold through for the quarter, generating $66B in revenue. Tailwinds from work-from-home initiatives will continue to benefit Mac and iPad shipments, with 30% YoY growth planned for iPad builds in 2021 suggesting those tailwinds could last for quite some time.

An acceleration in App Store growth from Sensor Tower data should sustain Service’s growth throughout 2021, possibly in the “high-teens percentage.”

J.P.Morgan has a price target for Apple of $150.


The forecast from Wedbush for the quarter has Apple managing to deliver “eye-popping” iPhone shipments in the “low to mid” 90 million range, based on supply chain observations. This is up from an 80 million range expectation in December and a 75M prediction for the quarter in October.

China is an important market for Apple, the firm suggests, with roughly 20% of iPhone upgrades in 2021 anticipated to stem from the region. “Considerable strength” is observed in the market, with positive trends heading into the year.

For full-year builds, Wedbush speculates it could be possible for Apple to sell more than 240 million iPhone units, and possibly even 250 million, beating the record of 231 million units in 2015. With approximately 350 million of 950 million iPhones in use in the world in the “window of an upgrade opportunity,” it is proposed this could result in a massive upgrade cycle, and “represents a sweep the leg’ movement against the lingering bear camp.”

In terms of revenue, it is expected the Q1 2021 results will be at around $100.2 billion, with an EPS of $1.23. Wedbush has also raised its 12-month price target from $160 to $175.


In a note released on Monday, UBS offered its forecast for Apple’s financials, raising its estimate from $98.9 billion to $106.9 billion in revenue for the quarter, and the EPS from $1.35 to $1.45. This is credited to better iPhone sales, the high ASP mix towards the Pro models, and strong Mac sales.

It is expected iPhone will hit $63.8 billion in the quarter from sales of around 78.5 million units, up from the previous forecast of $59 billion due to the higher-priced model skew. This is apparently the case for both US and China markets, with the Pro models accounting for 37.5% of the mix, up from 30% for the iPhone 11 generation, while the iPhone 12 mini’s 10% share will limit the drag on the ASP.

On Macs, the introduction of new M1-equipped models and “persistent industry demand strength” due to remote working and educational needs could bring that segment’s revenue to $9.5 billion, based on 6.9 million units.

UBS has a price target of $115.

Apple Long (Buy)

ENTER AT: 146.25

T.P_1: 149.96

T.P_2: 156.59

T.P_3: 164.89

T.P_4: 175

S.L: 134.10

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