Eight analysts give Apple’s earnings outlook: iPhone’s strong performance in the US may offset China’s weakness

As the balance of iPhone supply and demand is later than usual, it is expected that the quarter-on-quarter decline in the third fiscal quarter will be greater than in previous years

Apple will release its 2021 fiscal third quarter earnings report on July 27, local time in the United States. Wall Street expects Apple to usher in another strong performance. Apple did not provide formal revenue guidance for the third fiscal quarter, but it did say that it expects to achieve “strong double-digit growth.” However, Apple added that because the iPhone supply and demand balance is later than usual, it is expected that the quarter-on-quarter decline in the third quarter will be greater than in previous years.

In addition to announcing the financial report on July 27, Apple CEO Tim Cook and CFO Luca Maestri will also discuss the financial report with financial analysts.

In the third fiscal quarter, Apple released a series of new software updates, including iOS 15, MacOS Monterey and so on. At the same time, this quarter is also a complete quarter since Apple launched the M1 iPad Pro, updated Apple TV 4K and AIRTAG tracking accessories and other new hardware. In addition, the third fiscal quarter is the last full fiscal quarter before the release of the new iPhone in September. The IPhone 12 and iPhone 12 Pro cycles are described by some analysts as “super cycles”, and there are signs that demand for iPhone 12 models has not slowed down before the release of “iPhone 13” in late 2021.

Looking to the future, rumors are still fermenting. There have been rumors about new Mac models equipped with Apple’s Apple Silicon processor throughout the quarter, including 16-inch MacBook Pro and 14-inch MacBook Pro. Although Mac income is still positively affected by the work-at-home environment, many consumers may insist on buying the more powerful new MacBook Pro.

Wall Street expects Apple’s third-quarter revenue to be approximately $73 billion and earnings per share of $1.01. The following are the specific expectations of eight analysts on Apple’s 2021 third quarter report:

Rod Hall

Goldman Sachs analyst Rod Hall believes that Apple will announce solid revenue and profit growth data in the third quarter. Looking ahead, he also expects the company to provide strong fourth-quarter performance guidance. Hall’s expectations are driven by the surge in demand for iPhones in the United States, positive iPhone production data in the third quarter, and a potentially large backlog of iPad revenue.

In addition, the strong performance of the iPhone in the United States may also offset China’s weakness. As of the end of June, sales data provided by China showed that so far in 2021, total mobile phone shipments have fallen by 27% year-on-year. Hall wrote: “We continue to be cautious about iPhone demand expectations later this year, but we expect Apple to report mainly good news.”

In Hall’s view, due to the release of the iPhone 12 later than usual, the fourth-quarter revenue as of the end of September will pose less of a challenge to Apple. The analyst also believes that Apple had a backlog of $3 billion to $4 billion in revenue when it entered the third quarter, most of which were related to iPad.

Hall expects Apple’s announced revenue of 72.5 billion U.S. dollars, gross profit margin of 42.1%, and earnings per share of 0.99 U.S. dollars. The analyst maintained Apple’s target stock price of $130 for the next 12 months, which is lower than the expectations of many other analysts who follow the company. Hall estimates that Apple’s fourth-quarter revenue may be 83.1 billion U.S. dollars, with earnings per share of 1.12 U.S. dollars.

Katie Huberty

The first Department of JP Morgan analyst (Morgan Stanley) Katie Huberty (Katy Huberty) expects Apple’s third quarter revenue of $ 74.7 billion, halibut 2% higher than Wall Street expected before. This figure will also mark a year-on-year increase of 25% compared to the third fiscal quarter of 2020. Huberty added that she expects Apple’s reported profit margin to be about 41.8%.

Supported by positive data from the supply chain, Huberty raised its iPhone shipment forecast from 231 million to 238.5 million. In addition, she predicts that app store revenue may reach $16.7 billion, a year-on-year increase of 27.1%. All of this convinced Huberty that Apple will set a new performance record in the third fiscal quarter. She maintains her estimate of Apple’s target price for the next 12 months at $166.

David Vogt

About a week before Apple’s July 27 earnings conference call, UBS analyst David Vogt raised his expectations for Apple’s third-quarter 2021 results. Vogt currently estimates Apple’s third-quarter revenue at 74.7 billion U.S. dollars, higher than the previous 71.3 billion U.S. dollars. He also increased his earnings per share from US$0.95 to US$1.01.

The analyst also raised his forecast for iPhone shipments in fiscal 2021 to 227 million units. Looking forward to 2022, Vogt expects that shipments will further rise to 225 million units. Vogt also raised Apple’s price target for the next 12 months from the previous $150 to $160.

Daniel Ives

Wedbush Securities analyst Daniel Ives (Daniel Ives) believes that the current Wall Street’s expectations for Apple’s third-quarter performance are too conservative, that is, revenue of $73 billion and earnings per share of $1. He mentioned the potential advantages of the iPhone and the continued growth momentum of the company’s service business.

Ives said Wall Street’s initial expectations may have been affected by a shortage of chips and parts. However, he claimed that the strength of Apple’s product lineup has “offset any short-term weakness.” He also believes that the current success story of the iPhone may continue into 2022.

The analyst maintained his target price of $185 for Apple in the next 12 months and a rating of “outperform” on the company’s stock. He listed Apple as one of Wade Bush’s top picks.

Brian White

Monness Cresi Hardt analyst Brian White predicts that Apple will break expectations and achieve total revenue of $80.33 billion in the third fiscal quarter, which will mark a year-on-year growth of 35%. White expects earnings per share of US$1.16, a decrease of 10% from the previous quarter.

White predicts that Apple’s iPhone revenue will be $39.1 billion, Mac revenue will be $9.6 billion, iPad revenue will be $6.9 billion, wearables, home and accessories revenue will be $7.5 billion, and service business revenue will be $17.2 billion. Dollar. He maintains a “buy” rating on Apple stock and a target price of $180.

Canaccel Genuity

Before Apple released its 2021 fiscal third quarter earnings report on July 27, analysts at Canaccel Genuity raised Apple’s earnings expectations and target stock price for the next 12 months.

The Canadian-based brokerage company raised its iPhone revenue forecast for the third fiscal quarter from US$32.7 billion to US$35.8 billion, and raised its earnings per share forecast from US$0.94 to US$1.03. For 2021 and 2022, the company raised its earnings per share forecast for Apple from US$5.12 and US$5.49 to US$5.45 and US$5.85, respectively. The company stated that Apple is “in a good position and is expected to benefit from the 5G upgrade cycle”, adding that it expects a strong growth trend to contribute to higher-margin service revenue.

Canaccel Genuity raised Apple’s target stock price for the next 12 months from $165 to $175 and reiterated its “buy” rating on the company’s stock.

Gene Munster and David Stockman

Loup Ventures analyst Gene Munster (Gene Munster) and David Stockman (David Stokman) expects Apple’s third-quarter revenue rose 23 percent is expected to “rise slightly.” Due to the shortage of parts, these numbers are expected to decline, which may have had an impact of $3 billion to $4 billion in Mac and iPad sales.

In the foreseeable future, this growth will continue, and Apple is expected to enjoy the positive impact of continuous work-at-home practices, “5G enthusiasm” and new business areas such as AR and MR, health and autonomy within two years.

The two analysts predict that Apple’s third-quarter revenue will reach 73.3 billion U.S. dollars, earnings per share of 1.04 U.S. dollars, an increase of 61% year-on-year, iPhone revenue growth of 33%, service revenue growth of 18%, Mac growth of 13%, iPad growth of 9 %.

Amit Dariani

Evercore analyst Amit Daryanani (Amit Daryanani) predicts that Apple will announce relatively strong third-quarter revenue and earnings data. However, with the increase in the number of new crown pneumonia infections and the impact of flooding at Apple’s production base in China, it may limit Apple’s growth in the fourth fiscal quarter.

The analyst believes that given the relatively late balance of supply and demand for the iPhone 12, Apple will achieve strong year-on-year growth in the third fiscal quarter. However, he expects the fourth-quarter revenue outlook to be at least 5% lower than other analysts’ consensus estimates. Darianani maintains an “outperform” rating on Apple stock and a target stock price of $175 in the next 12 months. 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/eight-analysts-give-apples-earnings-outlook-iphones-strong-performance-in-the-us-may-offset-chinas-weakness/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-07-27 04:55
Next 2021-07-27 04:56

Related articles