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Here’s what Wall Street analysts are saying about Apple’s results (AAPL)

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Apple stock fell 2% on Tuesday after the iPhone maker posted its earnings for the second quarter of the 2017 fiscal year.

Its Q2 revenue — $52.9 billion (£41.0 billion) — missed analyst expectations as the company's iPhone sales cooled off.

Apple CEO Time Cook put this down to rumours about the new iPhone, possibly the iPhone 8, suggesting that people are holding out for an upgrade.

"We're seeing what we believe to be a pause in purchases of iPhone which we believe are due to the earlier and much more frequent reports about future iPhones," Cook said on a conference call. "That part is clearly going on and what's going on behind the data. We are seeing that in full transparency."

Despite the subdued set of results, analysts remain overwhelmingly positive about Apple, though some are revising down their price targets and guidance for investors. We've rounded up more than half a dozen analysts' notes about Apple and what they're forecasting in the year to come.

But first, here are the key numbers, versus analyst expectations:

  • Q2 EPS (GAAP): $2.10, up 10% year-over-year, vs expectations of $2.02
  • Q2 revenue: $52.9 billion, up 4% year-over-year, vs expectations of $53.1 billion
  • Gross margin: 38.9%, down 0.1% year-over-year, vs expectations of 38.7%
  • iPhone unit sales: 50.76 million, flat year-over-year, vs expectations of 51.4 million
  • iPhone average selling price: $655, up 2% year-over-year, vs expectations of $66
  • iPad unit sales: 8.9 million, down 12% year-over-year
  • Mac unit sales: 4.1 million, down .01% year-over-year

Read on to see what analysts had to say about the results …

Credit Suisse: BULLISH

Rating: Overweight

Price Target: $170

Comment: "Apple reported an OK set of results this quarter, with revenues of $52.9bn (+4.6% yoy /-32.5% qoq) and EPS of $2.10 vs. consensus of $2.02. With the iPhone showing sustained growth, and Services again showing robust growth, we still look forward to an iPhone 8 super cycle. Long Term, given high retention rates, a superior ecosystem, and a multi-product compute advantage, we believe FCF of ~$75bn should be sustainable. We adjust CY17 revenue/EPS to $234bn/$9.32 (from $231bn/$9.51), and CY18 revenue/EPS to $257bn/$11.26 (from $252bn/$11.44), and become more conservative on units in the near-term, as well as GM."

Bank of America Merrill Lynch: BULLISH

Rating: Buy

Price Target: N/A

Comment: "We reiterate our Buy rating on Apple given 1) strong capital return program with annual increases, 2) optionality from a large cash balance, and 3) an expected strong upgrade cycle for iPhone 8."

Citi: BULLISH

Rating: Buy

Price Target: $160

Comment: "Apple reported March quarter results with sales slightly below consensus while EPS above street expectations on higher gross margin and contribution from other income and lower tax rate. June quarter sales and implied EPS guidance slightly below consensus. Stock trading down -2% afterhours due to softer than expected sales results. Apple also provided an update on their capital returns program and are now targeting $300bln capital returns by March 2019 year from the prior program of ~$250bln by March 2018 (TTM of ~$46bln/year). This includes a quarterly dividend increase of 10.5%.

See the rest of the story at Business InsiderOriginal Article

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