Here's what every major analyst said about Apple's better-than-expected earnings report

Published Thu, Oct 31 20197:19 AM EDTUpdated Thu, Oct 31 20191:42 PM EDT

Wall Street analysts are starting to feel more bullish on Apple after the company released its fiscal fourth-quarter earnings report on Wednesday after the bell. Apple topped analyst expectations and reported earnings that beat on revenue and earnings per share. Apple reported earnings of $3.03 for the fourth quarter versus $2.84 expected, according to analysts surveyed by Refinitiv. The company issued an upbeat holiday forecast and said its Wearables and Services businesses continue to grow. iPhone sales also beat analyst estimates but are still down from the previous year. Shares of the company were up 1.9% in afternoon trading Thursday. Here's what major analysts said about Apple's earnings report: "Against a bar that seemingly kept getting higher into the print, Apple delivered as the iPhone 11 cycle is off to a better-than-expected start and commentary about further improvement in y/y trends expected during C4Q was encouraging," analysts at Credit Suisse said. If the earnings results are any indication, 2020 is shaping up to be a solid year for the tech giant, according to analysts at Piper Jaffray. "Looking into FY20, Apple is in the midst of a perfect storm, with current iPhone performing at-or-above plan, non-iPhone (especially wearables and services) trending better than expected and growing anticipation for 5G iPhones that will be coming late in the fiscal year," they said. It's "Santa Clause in October" analysts at Citi said, gushing about the earnings report. The firm said the stock may be volatile in the months head due to a confluence of holiday shopping preferences and political issues but that it was sticking by the stock. "Apple delivered upside to both the September results and the December outlook," they said. Another analyst said he wasn't convinced the company's iPhone issues are behind it and said investors should really wait for a more attractive entry point for the stock. "Our biggest question going into Apple's Q4 was whether we could become more confident in the upcoming iPhone cycle. The short answer? Not really," Bernstein analyst Toni Sacconaghi said. "While Q1 revenue guidance is somewhat reassuring, we still believe Apple will face a material headwind to iPhone average selling price this year, meaning that weakness in iPhone units remains a key wildcard." But for analysts at Morgan Stanley, the earnings report was enough to confirm the company is firing on all cylinders. "With clear catalyst path, AAPL remains top pick for 2020," analyst Katy Huberty said. Credit Suisse - neutral rating "Against a bar that seemingly kept getting higher into the print, Apple delivered as the iPhone 11 cycle is off to a better-than-expected start and commentary about further improvement in y/y trends expected during C4Q was encouraging. Further, broad-based Services momentum checked the box for the longer-term bull thesis, with several key categories once again reaching all-time highs (App Store and AppleCare, among others)." Citi - buy rating "Apple delivered upside to both the September results and the December outlook. The company's new product announcements are setting up for a healthy Christmas shopping season. We believe the new AirPods Pro will likely be a big hit for stocking stuffers for Christmas as will the Apple Watch. .. .We recognize the stock price has materially appreciated up +56% year to date compared to the S & P500 up +21%. .. .We expect share price volatility given the political, tariff, trade war, and consumer holiday shopping preferences in the months ahead." Deutsche Bank - hold rating, price target to $235 from $230 "Strength in the quarter came from better-than-expected iPhone, Services, and Other revenues, while iPad/Mac were close to investor expectations. We remain impressed, in particular, with the acceleration in Services revenue growth, accompanied by improving margins. As we look to the guide, we do see some conservatism embedded as the revenue guide suggests a modest q/q step-up in iPhone revenues when compared to the past, excluding last year, especially in conjunction with our sense that iPhone 11 generation receptivity has been better than last year's 10S generation. .. .Overall, when we consider AAPL's recently expanding valuation with the company's fundamental levers for further EPS upside, we see a balanced reward profile relative to the risks." Bernstein - market perform rating, price target to $250 from $225 "Our biggest question going into Apple's Q4 was whether we could become more confident in the upcoming iPhone cycle. The short answer? Not really. While Q1 revenue guidance is somewhat reassuring, we still believe Apple will face a material headwind to iPhone ASPs this year, meaning that weakness in iPhone units remains a key wildcard. AAPL is now at five year highs on relative valuation and we see risk reward as balanced; and would look for a more attractive entry point, or higher conviction on the strength of the current iPhone cycle, to look to add more aggressively to positions." J.P. Morgan - overweight rating, price target to $280 from $275 "Apple managed to clear even the high hurdle of investor expectations heading into F4Q19 print, following a recent increase in consensus volume forecasts for the 2019 iPhones, which in turn raised the bar for F4Q19 results/ F1Q20 guide. .. .The positive leverage impact will drive higher investor confidence in gross margin expansion medium-term, driven both by total revenue growth as well as potential return to growth for iPhone revenues." Bank of America - buy rating, price target to $270 from $260 "Results and guide good enough to carry the year. We expect shares of Apple to trade higher into year-end given that (1) estimate revisions are likely to be more positive, (2) demand trends appear to be solid for iPhones, (3) wearables are not in supply demand balance and can drive continued upside into 1H20, (4) potential launch of iPhone SE2, Augmented Reality products and 5G iPhones in 2020 drive positive headlines, (5) gross margins headed higher in 1H20 given higher services mix." Morgan Stanley - overweight rating, price target to $296 from $289 "With clear catalyst path, AAPL remains top pick for 2020. Apple is converting its significant R & D investment ($16.2B in FY19) to introduce innovation across a broader portfolio of products and services. At the same time, the company is holding margins while making its products more affordable through pricing, trade-in, financing and bundle offers. These factors support our view that revenue growth will continue to improve through FY20, even ahead of the 5G iPhone launch and TV+ paid user ramp in FY21." Barclays - equal weight rating, price target to $236 from $224 "Apple reported a solid quarter with slightly better than expected revenue and an EPS beat more on Opex and tax rate. Services and Wearables were the highlights, with growth accelerating to 18% and 54%, respectively. .. .We still see pressure on the iPhone business, and believe that supply chain data may start turning over the next month as compares get more challenging. It should be offset by Services growth, particularly as TV+ bundle starts to contribute." Evercore ISI - outperform rating, price target to $262 from $253 "While AAPL has had a good run (+54% YTD) we see sustained room for upside given the Dec-qtr guide looks extremely conservative (guided +36% q/q, only ~200bps better vs. Dec-18 – when AAPL negatively pre'd) and CY20 could mark the start of a 5G driven cyle that could bolster the stock higher." Raymond James - outperform rating "Our upgrade over the summer was based on our optimism for next year's 5G cycle coupled with low expectations for this year. AAPL's results confirmed what we learned in Asia last month, that this year's cycle appears to be beating those modest expectations. We think a combination of lower prices and improvement to battery life and the camera is allowing for modest growth. But our positive thesis remains underpinned by our expectation for a two year upgrade cycle starting next year, which we think will benefit both units and mix. While the stock has already risen since the summer, we don't think the full effect of the 5G cycle is baked into estimates, leaving more room for the stock." Cowen - outperform rating, price target to $290 from $250 "iPhone demand is outperforming market expectations owing to replacement demand, product pricing, and availability of trade-in and financing options. The 5G iPhone cycle a year from now could continue this momentum, possibly driving multiple expansion as well. Wearables and Services sales continue to drive EPS growth at double-digit rates, and as TV+ and Arcade services start to enter the narrative we look for signs of the path to monetization." Piper Jaffray - overweight rating, price target to $270 from $243 "Looking into FY20, Apple is in the midst of a perfect storm, with current iPhone performing at-or-above plan, non-iPhone (especially wearables and services) trending better than expected and growing anticipation for 5G iPhones that will be coming late in the fiscal year." Nomura Instinet - neutral rating, price target to $225 from $205 "The once uncertain iPhone 11 cycle now appears sufficient to restore slight iPhone growth and modest corporate growth in FY20. Investors may now look forward to the brightening prospects of the first 5G phones due next year. We lift our estimates modestly." Wells Fargo - market perform rating, price target to $245 from $215 "We think Apple's iPhone results met increasing expectations; commentary on continued y/y decline deceleration providing confidence in bridge to 2H2020 5G cycle set-up. F4Q19 iPhone revenue of $33.36B was -9% y/y; compares to -12%, -17%, and -15% in F3Q19, F2Q19, and F1Q19, respectively. We think that Apple's pricing strategy around the iPhone 11 will continue to be a catalyst into the holiday season with reports of Apple increasing LCD component orders." UBS - buy rating, price target to $280 from $275 "Apple reported a strong quarter and met higher expectations with particular strength in Wearables (see our report on how wearables could replace 40MM+ iPhones HERE) and strong start to the iPhone 11 cycle. Services revenue reaccelerated with increased 18% YoY growth vs. 13% in the prior quarter, with double-digit growth in all geos. The quarter was fairly clean with no particular area of weakness to call out."

Apple CEO Tim Cook.

Stephanie Keith | Getty Images

Wall Street analysts are starting to feel more bullish on Apple after the company released its fiscal fourth-quarter earnings report on Wednesday after the bell.

Apple topped analyst expectations and reported earnings that beat on revenue and earnings per share. Apple reported earnings of $3.03 for the fourth quarter versus $2.84 expected, according to analysts surveyed by Refinitiv.

The company issued an upbeat holiday forecast and said its Wearables and Services businesses continue to grow. iPhone sales also beat analyst estimates but are still down from the previous year.

Shares of the company were up 1.9% in afternoon trading Thursday.

Here's what major analysts said about Apple's earnings report: