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Have we reached the height of Apple? Some say the company is just getting started

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Featured Quarter for Apple Inc. Analysts are questioning whether we’ve seen Apple’s heyday — or whether the smartphone giant is still “beforetime” in its journey to smartphone dominance.

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Apple shares fell 0.9% in Wednesday morning trading following the company easily beat expectations for its June quarter results, but it predicted revenue growth will slow in the current quarter given expectations of greater impact from supply constraints and a return to more average growth for the period of red services business. hot. The stock had fallen 2.9% earlier in the session prior paring its losses.

Opinion: Apple’s vast profits haven’t helped its stock, and here’s why

Apple is seen as a powerful beneficiary of the pandemic’s digital boom, and CEO Tim Cook took up the topic in response to an analyst’s interrogate about the earnings call. He noted the powerful demand for Macs and iPads amid the shift to secluded work, as well as the growing interest in digital services, although he also noted that other services such as advertising and AppleCare have seen negative effects, while consumers may be unwilling to make ” more complicated”. Buying an Apple Watch or an iPhone.

He continued, saying that the post-pandemic world “would be very pleasing for us” and customers.

However, the report and the forecast have sparked debate about how much juice is left in Apple’s story. In a note titled “Strong triumph, but potential fiscal year 21 peak,” BMO Capital Markets analyst Tim Long spoke about the company’s outlook for slower growth, while also pointing to some of the broader concerns that are making him pause on the stock.

Although Long boosted his price target to $142 from $134 following the report, he maintained a “basically equal” rating for headwinds that maintain current demand levels including [the iPhone 13] Cycle, tighter fixtures on Mac/iPad, regulatory burden (App Store, Google [traffic acquisition costs]) as well as a sincere evaluation.”

Citi’s Jim Suva wrote that Apple has “almost a packed quarter,” except for the fact that it has not issued official guidance for the September period. He went on to say that Apple’s prediction that sales would grow in double digits but at a rate lower than the 36% shown in the June quarter indicated a “very wide range.”

Suva noted that his estimates and the agreed numbers would “significantly rise” following the report and comment. He has maintained a purchase rating and a $170 price target on Apple stock

Several other analysts chime in with optimism about Apple’s position in the “beforetime” days of the 5G upgrade cycle.

Jeffreys analyst Kyle McNeely wrote that Apple’s powerful results were “atypical” for what is usually the company’s weakest quarter of the year, in what could be a positive sign more broadly for the company.

“We think that’s the continued attraction they’re getting with the iPhone 5G lineup,” he said. “In our view, the street still does not appreciate that Apple is in a position to benefit from the ongoing 5G product cycle,” with data from T-Mobile US Inc. Noting that promotion rates are still low.

McNealy has a purchase rating and a price target of $175 per share.

Aaron Rakers of Wells Fargo took a similar view. “With investors now largely focused on sustaining demand trends in the second half of 2021 and 2022, we take the view that we are still in the beforetime stages of the 5G cycle (limited countries with dual penetration of 5G today) and believe that consumer demand from likely to remain powerful with a vast upgrade opportunity in the coming,” he wrote.

Rakers rated the stock overweight and boosted its price target to $165 from $160.

Of the 44 analysts tracked by FactSet covering Apple stock, 33 have purchase ratings, eight have grip ratings, and three have sell ratings. The average target price is $161.80, about 10% overhead the current levels.

The stock, which reached a record close at $149.15 earlier this month, is up 9.6% year-to-date, while the Nasdaq-100 is up 16.6% and the Dow Jones Industrial is up 14.5%.


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