Wall Street says ignore disappointing Apple quarter

Key Points

Wall Street analysts generally reiterated their bullish ratings on Apple after the company reported earnings Tuesday.
Approximately 75 percent of firms have buy ratings on the company, according to FactSet.

Apple bulls on Wall Street were unfazed by mixed fiscal second-quarter financial results and stayed optimistic over the upcoming iPhone 8 launch. The smartphone maker reported better-than-expected earnings Tuesday after the close, but iPhone shipments fell short of Wall Street estimates. Apple shares traded down 1 percent at the open of trading Wednesday in response to the earnings report. Nearly 75 percent of Wall Street analysts still have buy ratings on Apple, according to FactSet. Below is a summary of what Wall Street firms are now telling clients to do with the stock. Bank of America Merrill Lynch Bank of America Merrill Lynch analyst Wamsi Mohan reaffirmed his buy rating on Apple and $155 price target, representing 5 percent upside from Tuesday's close. "We rate Apple a buy on potential upside from 1) continued long-term opportunity in China, 2) potential share gains from the release of a lower-end iPhone, 3) strength in the upcoming iPhone 8 cycle, 4) optionality in cash balance, revenue sources like Apple Pay, Apple Watch, home/health kit, etc., that will take time to mature." Credit Suisse Credit Suisse analyst Kulbinder Garcha reiterated his outperform rating on Apple and $170 price target for the shares, representing 15 percent upside from Tuesday's close. "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 … advantage, we believe FCF of ~$75bn should be sustainable." Citi Research Citi Research analyst Jim Suva reaffirmed his buy rating on Apple and $160 price target for the shares, representing 8.5 percent upside from Tuesday's close. We are "looking ahead to iPhone 8 … 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." Cowen Cowen analyst Timothy Arcuri reiterated his outperform rating on Apple. He raised his price target for the shares to $160 from $155, representing 8.5 percent upside from Tuesday's close. "While hardly the contrarian call it was when we upgraded a year ago on our "powder keg" thesis, this Q was fine and the path of least resistance remains up - at least until the iPhone launch this Fall. As we have said, a slight delay of the OLED model is possible/probable, but this just pushes more units into CQ4 and Street #s are still way too low." Deutsche Bank Deutsche Bank analyst Sherri Scribner reiterated her hold rating on Apple. She raised her price target for the shares to $130 from $125, representing 12 percent downside from Tuesday's close. "While there wasn't much in the Q to change viewpoints, trends in China continue to worsen and we remain concerned about iPhone affordability in emerging markets. We believe investors will mostly maintain positions following the print and continue to focus on the next iPhone refresh."

Tim Cook, chief executive officer of Apple Inc.

David Paul Morris | Bloomberg | Getty Images

Apple bulls on Wall Street were unfazed by mixed fiscal second-quarter financial results and stayed optimistic over the upcoming iPhone 8 launch.

The smartphone maker reported better-than-expected earnings Tuesday after the close, but iPhone shipments fell short of Wall Street estimates. Apple shares traded down 1 percent at the open of trading Wednesday in response to the earnings report.

Nearly 75 percent of Wall Street analysts still have buy ratings on Apple, according to FactSet.

Below is a summary of what Wall Street firms are now telling clients to do with the stock.