Apple’s guidance for the all-important September quarter was cheered by Wall Street amid concerns about the impact on sales from the U.S.-China trade war and increasing competition from smartphone rivals. The positive commentary helped push the iPhone maker’s market value briefly above $1 trillion on Wednesday.
The tech giant’s results were “good enough for now,” Raymond James said in a note, while Goldman Sachs and Piper Jaffray raised their price targets. However, some analysts aren’t getting excited just yet, waiting instead for the release of Apple’s 5G-enabled phones, which aren’t likely to arrive before 2020.
Shares in the iPhone developer rose as much as 6%, the stock’s highest in almost nine months. Apple has regained losses it incurred months back in May, when the company was faced with an antitrust suit and as rising trade tensions weighed on shares.
If today’s climb can hold until later in the day, Apple’s market value could rest above $1 trillion depending on the number of outstanding shares the company had at the end of the quarter.
Here’s what analysts are saying about Apple’s results:
Piper Jaffray, Michael Olson
Overweight, raises price target to $243 from $230
Apple reported revenue for the June quarter and EPS ahead of the Street. Looking at the remainder of the full-year 2019, expect limited excitement around this year’s iPhone launches.
However, as long as other segments continue to perform at or above expectations, this will tide investors over until anticipation for 5G iPhones begins to build, which is likely to start happening in the second half of 2019.
Goldman Sachs, Rod Hall
Neutral, raises price target to $191 from $187
Wearables drove an in-line earnings print and slightly better-than-expected guidance. Services missed, but there’s signs of China stabilization.
Continues to see risk to consensus expectations, suspects that the short-term risk on services is to the downside, but supporting data on this is unlikely to materialize until there is more clarity on iPhone sales in October/November.
With Apple exposed to trade newsflow volatility, the stock is fully valued.
Raymond James, Chris Caso
Outperform, price target $250
Despite the absence of incremental downside, doesn’t think this means Apple has yet turned the corner. Continues to expect a weak iPhone cycle through June 2020 and, while expectations are already low, doesn’t see a catalyst until the September 2020 launch of 5G iPhones.
Raises 2019 EPS estimate to reflect revenue upside and lower operating expenses versus prior model.
Rating reflects view that the iPhone cycle will return to growth. “We have chosen to be early in our call.”
Morgan Stanley, Katy Huberty
Overweight, price target $247
Sees potential for meaningful multiple expansion as new services re-accelerate growth and Apple approaches the launch of 5G iPhones.
While other technology companies are reducing growth numbers to reflect difficult comparatives and slowing macro data points, Apple has “already taken its medicine” with China-related estimate cuts in January.
Only disappointment was that accelerating App Store growth didn’t flow through to an acceleration in total services growth.
Wedbush, Daniel Ives
Outperform, price target $235
Report to be viewed positively by the Street as many skeptics were looking for weakness on the iPhone front, given the noise coming out of China and the smartphone industry. Bulls were fearing the worst on this front.
Overall, would characterize this quarter/guidance as a “major feather in the cap for the bulls,” that should drive the stock to new highs over the coming months.
Lynx Equity Strategies, KC Rajkumar
Lynx Equity is “at odds with Street consensus,” citing its thesis that Apple is unlikely to launch 5G iPhone models in 2020. “We continue to believe there is downside to consensus estimate for iPhone revenue in FY19 and FY20.”
“While a beat to lowered buy-side expectations may result in a brief pop, we think the stock is headed downward from current levels in the near-term as iPhone build plan estimates for FY20 come down from current estimates.”
Wells Fargo, Aaron Rakers
Market perform, price target $215
“Apple delivered positive results/guide in the face of a challenging macro/geopolitical landscape.” Investors will most notably be focused on iPhone stabilization, improvements in China, continued strength in services, and momentum of the company’s wearable business.
“We continue to be cautious on near-term iPhone demand as we think investor sentiment is more notably focused on iPhone expectations into a 5G upgrade cycle” in the second half of 2020.