That is what analysts anticipate subsequent week
A customer service rep works with customers at the Apple Store as shoppers return to indoor shopping after Los Angeles County eased restrictions on places like Beverly Center in Beverly Hills on October 8, 2020.
Genaro Molina | Los Angeles Times | Getty Images
Apple will announce its earnings for the first quarter of 2021 on Wednesday, and analysts’ expectations are bullish.
The company failed to delight investors in its fourth quarter, which ended Sept. 26, 2020, due to weak iPhone sales. However, the weakness was likely due to the fact that people were waiting for the new iPhone 12, which didn’t go on sale until October.
Wednesday’s earnings report marks the first full season since Apple released its new line of iPhones and subscription services.
The company’s stock rose about 1% in the pre-market on the back of broader market gains.
Here’s what analysts say about the tech giant:
Morgan Stanley Research
Morgan Stanley analysts said in a Thursday note they expected a record quarter in December.
“Our recent discussions suggest that investors expect Apple to post solid but not great results for the December quarter. We disagree and believe Apple is expected to generate record sales and earnings per quarter,” wrote the analysts and raised their price target to $ 152 from $ 144. “From our point of view, the iPhone 12 was Apple’s most successful product launch in the past 5 years.”
The company highlighted the strength of Apple’s entire portfolio of products and services based on the adoption of 5G, continued remote work and learning, and continued engagement in the App Store. Analysts added that they expect Apple’s five revenue segments to see double-digit year-over-year growth in December.
“Overall, our December quarter revenue of $ 108.2 billion is 5% above consensus (we’re above consensus in all segments except Services), while our earnings per share of $ 1.50 are 7% above consensus,” they said. “We expect demand to continue and our estimates for FY21 sales and earnings per share are both 5% above consensus.”
The company announced in a Thursday announcement that the stock “looks delicious,” and considered its target price of $ 133.
“As mentioned earlier, we believe Apple’s first line of smartphones is better positioned on 5G networks than investors will appreciate for the following reasons: 1) carrier support, 2) affordable, discretionary income, and 3) 1B Remote Working and 1B Remote Learning We also attribute the recent strength in stocks to investors who embraced the idea, “wrote Tom Forte, analyst at DA Davidson.
The company said it will consider iPhone sales trends, privacy and advertising comments, and the potential impact of the new Biden administration.
“We expect revenue to grow 15.7% to $ 106,236 million, above the consensus guidance of $ 102,563 million,” the company said. “Note that Apple did not provide any formal guidance, but was expecting double-digit growth for all product categories. The iPhone expects single-digit growth. In terms of profitability, we estimate EBITDA at $ 33,525 million (for a margin of $ 31. 6%). This is above the consensus estimate of $ 31,763 million. Finally, we project GAAP earnings per share of $ 1.52, compared to the consensus estimate of $ 1.40. “
The company expects Apple to see strong iPhone sales, but said it won’t come as a surprise due to a likely strong iPhone 12 cycle. Analysts, including Toni Sacconaghi, raised their EPS estimates to $ 1.53 for the first quarter and to $ 4.26 for FY21, reflecting higher iPhone ASPs, a weaker US dollar and strong Mac / iPad Sales is attributable.
“Although our estimates are above consensus, we believe that our numbers are relatively in line with expectations in the country,” the analysts wrote on Thursday. “We expect Apple to provide ‘guidelines’ rather than ‘guidelines’ for the second quarter, but are likely above consensus due to currency effects and expect slightly higher than normal seasonality due to the timing of the iPhone 12 launch.”
The company said it would take into account Apple’s comments on potential smartphone price gains, ongoing regulatory concerns, and Apple’s launch and promotion of new services, but said Apple needed something bigger to beat expectations.
“AAPL has had tremendous success and is acting in line with large tech companies with higher growth rates. With a 33x consensus of 21 EPS and expectations above street level, we are struggling to see a significant outperformance at AAPL without a surprise product announcement or migration to a bundled hardware subscription model, “wrote the.
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