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A day after Apple's earnings, the Street looks toward iPhone 8 and tax reform

Here's how Wall Street is reacting to Apple's quarterly results

A customer takes a picture with an iPhone 7 inside the new Apple store Saint- Germain during the first opening day on December 03, 2016 in Paris, France.
Chesnot | Getty Images
A customer takes a picture with an iPhone 7 inside the new Apple store Saint- Germain during the first opening day on December 03, 2016 in Paris, France.

Apple shares took a huge leap on Wednesday, a day after the tech giant reported strong demand for the iPhone 7 Plus as well as Mac growth in its first quarter earnings.

The iPhone maker reported earnings and revenue that easily beat Wall Street's projections, but gave future guidance on the lower end of expectations.

Though some analysts were put off by the weak guidance, the market is apparently looking past that. Instead, analysts looked toward the much anticipated September release of the iPhone 8 — the 10th anniversary of the release of the iconic device — which is expected to be a significant upgrade.

Analysts were also assured by Apple CEO Tim Cook's positive tone around tax reform under President Donald Trump.

Here is what analysts are saying after the quarterly results:

JPMorgan

JPMorgan reiterated its "overweight" rating on Apple and raised its December 2017 price target to $142. JPMorgan said the company has shown "resilience" despite a tougher than expected consumer backdrop.

"Tim Cook made bullish comments suggesting material iPad upgrades in the pipeline and even the Macbook Pro was supply constrained in FQ1. At this point we give up on pointing out the consumer risk and join the iPhone 8 party," JPMorgan said.

Goldman Sachs

Goldman said Apple alleviated some investors' fears about its future guidance. Goldman's key takeaways:

  • Total revenue of $78.4 billion compared to our estimate of $78.1 billion and the Street's $77.4 billion.
  • EPS of $3.36 compared to our estimate of $3.26 and the Street's $3.23.
  • Apple repurchased shares worth $10.9 billion during the quarter.

MS

"Apple is our top pick with the upcoming iPhone super cycle accentuated by the possibility of repatriation, tax reform, and M&A. Stronger [December] quarter and better than feared March guidance pave the path to our base case of $150, with $190 bull case becoming increasingly likely," the firm said.

Guggenheim

Guggenheim said Apple delivered more than enough to "scare bears and wake up investors."

With iPhones now stabilizing heading into their next refresh cycle (still 8 months away but nevertheless likely Apple's biggest in 3 years), at the same time as offshore cash swells [greater] $230 billion (repatriation anyone?) and Apple's R&D spend has doubled in the past 4 years (optionality for free), we see investors being paid to own the stock," Guggenheim said.

BMO

"March guidance is a little less impressive, but we believe sentiment will depend more on potential tax reforms and the assumed September iPhone refresh," BMO said.

BMO widened its 2017 and 2018 earnings out look for Apple to $8.99 and $10.15 a share from $9.05 and $9.89 a share.

Oppenheimer

The firm said it expects Apple shares to perform well over the next two quarters.

"CEO, Tim Cook, sounded positive on possible tax repatriation (91 percent of $238 billion cash balance is overseas as of F4Q16)," Oppenheimer said.

—CNBC's Anita Balakrishnan contributed to this report