Wall Street analysts have proved willing over the years to back up Apple on the latest focus of Apple management's bullish outlook. But there's a notable lack of analyst attention in the reports being issued after Apple earnings to what has been a major point of Apple bullishness in recent years: China.
Apple CEO Tim Cook again talked up the opportunity in China as sales in that key market stabilized. But in looking for a reason to be bullish as Apple stock shares declined on Wednesday morning by as much as 3 percent, the analysts weren't harping on China as a reason investors should be buying Apple on the dip.
Analysts noted the improvement in China, but at least four reports reviewed by CNBC didn't consider it a major near-term catalyst for Apple shares. Analysts are also asking whether something is structurally changing in Apple's China business. UBS analysts cited the fact that high-end smartphone penetration in China is now at 90 percent, according to a CNBC TV report on Wednesday morning.
Make no mistake: many Wall Street analysts remain bullish on Apple but are instead focused on rising speculation about next September's iPhone upgrade, a so-called supercycle with bigger upgrades than those included in this year's iPhone 7 launch.
"We see new form factor, better display and longer battery life driving shorter iPhone replacement cycles in fiscal year 2018, with double-digit revenue and EPS growth," wrote Morgan Stanley analyst Katy Huberty, who thinks the company will earn $10.60 per share in the year beginning next October, thanks to better growth in iPhones. "Shares historically trade closer to 14 [times estimating earnings] heading into a supercycle, which drives our new $148 price target."