Here's what every major analyst said about Apple's blowout earnings report

Published Wed, Jul 28 20216:20 AM EDTUpdated Wed, Jul 28 20217:43 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Powerful earnings for Apple earned praise from Wall Street analysts, but some cautioned that the stock could see short-term issues before picking up again as 2022 comes into focus. The hardware tech giant reported $1.30 in earnings per share on $81.41 billion in revenue for its fiscal third quarter. Analysts surveyed by Refinitiv were looking for $1.01 earnings per share and $73.30 billion in sales. The top-line outperformance was driven largely by the iPhone, which drove $39.57 billion in revenue. However, the company did warn that growth could slow in the next quarter, due in part to the ongoing semiconductor shortage. JPMorgan's Samik Chatterjee said in a note that the report reinforced 2022 could be another strong year for the iPhone, despite the supply chain issues. The firm reiterated its overweight rating and $175 per-share target, which implies 19.2% upside from Tuesday's $146.77 close. "While the uncertainty in supply limits near-term visibility for the company and investors alike, we see the long-term drivers unaffected by the temporal headwinds, which includes stronger than expected iPhone demand/ market share led by a strong upgrade cycle, which sets up for material revisions to 2022 iPhone volume expectations," the JPMorgan note said. Similarly, Atlantic Equities analyst Ianjit Bhatti said in a note that the short-term concerns shouldn't distract investors from the long-term trend. He reiterated his overweight rating and hiked his price target on the stock to $190 per share from $170 per share. "Supply constraints are expected to be a headwind to iPhone shipments in Q421, but we expect these purchases will be delayed rather than lost. We believe that iPhone revenue can increasingly be viewed as almost recurring in nature and raise our YE21 PT to $190," the Atlantic Equities note said. However, Bank of America analyst Wamsi Mohan said in a note that the chip shortage could be only part of the upcoming hurdles for the company. The firm reiterated its neutral rating and $160 price target on the stock. "Our concern remains that if the Delta variant of COVID creates further lockdowns, Apple could be faced with the dual headwinds of tougher comps and weaker demand in Hardware only modestly offset by any Services re-acceleration," the Bank of America note said. Apple's stock was down about 1.4% in premarket trading. Here's what analysts said about Apple earnings: Evercore ISI - Outperform, price target to $180 from $175 "Debate on 'Peak cycle' will persist for a while but fundamentally we see a trifecta of levers in place for AAPL to keep climbing higher – i) iPhone 5G cycle that is still early in adoption, b) monetization of install base across services and wearables and c) improved profitability and FCF as GMs stay higher. Sticking with OP and adjusting our target to $180 (prior $175) to reflect higher [forward 12 months] EPS." Citi - Buy, $170 price target Apple reported June quarter results with sales and EPS above consensus and a solid beat across all segments as consumer demand momentum continued amidst ongoing work and learn from home environment. No guidance was provided again due to COVID and continuing challenges at the retail level." Raymond James - Outperform, $185 price target "We reiterate our Outperform rating and $185 price target on Apple following June quarter results. Apple posted a strong quarter, with revenue 11% above consensus with most product segments posting solid results. While management did not provide specific revenue guidance, we believe commentary suggests ~30% y/y revenue growth, ahead of consensus. We remain optimistic for this year's iPhone cycle, given pent-up demand following last year's late launch and a large installed base yet to move to 5G, coupled with the likelihood of better availability of what turned out to be more popular high-end models, which should improve the mix." Barclays - Equal weight, price target to $142 from $134 "We raise our estimates and price target, but Maintain our EW rating, mainly on headwinds sustaining current demand levels including IP13 cycle, tougher comps on Mac/iPad, regulatory overhang as well as fair valuation." Baird - Outperform, $160 price target "Stock reaction was muted due to high expectations, though we expect the stock to continue to grow into its valuation as estimates surge higher. We remain positive on the work from anywhere benefits and significant and still-early 5G upgrade opportunity." Oppenheimer - Outperform, price target to $165 from $160 "We continue to believe Apple's in-house chip, the breadth and synergy across Apple devices, and the temporary lack of major feature innovation across consumer hardware set the company up for a period of accelerating share gains across product categories. The share gain and subsequent boost to active installed base positions the company well for further margin expansion from more sustainable growth in service revenues." Morgan Stanley - Overweight, price target to $168 from $166 "We walk away from the quarter more confident in the sustainability of revenue growth in FY22 where we model 5% growth compared to consensus of 4% Y/Y and buyside expectations of flat to down. ... We like the set-up into FY22. As we wrote in our earnings preview, sustainability of revenue growth remains the key investor debate, and we walk away from F3Q earnings with even more confidence that Apple will grow in the December quarter and in FY22." UBS - Buy, price target to $175 from $166 "Strengthening interest in Apple offerings results in material rev and EPS upside Although our research indicated Apple's FY3Q results would likely be solid and top ests, the magnitude of the rev and EPS upside in the qtr was somewhat surprising in our view given supply chain headwinds." Credit Suisse - Neutral rating, $150 price target "The business continues to execute well, with broad-based strength across the portfolio led by outsized iPhone growth in the early innings of 5G and Services monetization. That said, with the stock sitting at 26x Street CY22 EPS (in-line with Services peers), we remain Neutral against a backdrop of fading momentum vs. increasingly tough comps as (1) iPhone upgrades and ASPs/mix normalize as 5G becomes more mainstream, (2) App Store slows post-COVID, and (3) iPad/Mac demand fades." Bernstein - Market perform rating, $132 price target "Ironically, Apple's growth in FY Q3 may have been too strong. The company will be staring down very difficult comps in essentially every business in FY 22; consensus has been forecasting 3-4% revenue growth for Apple next year, which we believe may be difficult. Moreover, given its recent run, AAPL is back to trading at 28x P/FE, notably above its historical levels on a relative basis. While AAPL may continue to fare well amidst a seasonal trade, we believe that risk reward is balanced to modestly negative over the next six months." Canaccord - Buy rating, price target to $185 from $175 "The company continues to demonstrate the strength of its product ecosystem with strong double-digit growth across all categories. ... Apple is well-positioned to continue to benefit from the 5G upgrade cycle and anticipate strong overall growth trends as 5G smartphones ramp and its installed base expands with higher-margins services revenue. ... With the 5G upgrade cycle likely a benefit for the next several years, other hardware categories growing double digits, and continued mix shift towards high-margin services, we believe the share price is compelling for longer-term investors." Deutsche Bank - Buy rating, price target to $175 from $165 "Post results, we raise our estimates to reflect the F3Q beat and F4Q outlook and raise our price target from $165 to $175. With AAPL well positioned for a strong iPhone cycle and continuing to grow its product/offerings (increasing the $ per person spent on AAPL offering), we view its premium valuation as justified and maintain our Buy rating." Wells Fargo - Overweight, price target to $165 from $160 "Apple delivered F3Q21 results above our / consensus expectations, most notably driven by 15% upside to iPhone rev. and record services growth at +33% y/y. With investors' focus now largely on the sustainability of demand trends into 2H2021 & 2022, we take the view that we are still in the early innings of the 5G cycle (limited countries w/ double-digit 5G penetration today) and believe consumer demand is likely to remain strong w/ a massive upgrade opportunity ahead." Piper Sandler - Overweight, price target to $165 from $160 "We believe Apple is benefiting from the 5G upgrade cycle, which we think is likely to continue for at least another two years. However, we think we could start to see some deterioration in the Mac and iPad businesses as the world returns to normal. Overall, we are increasing our estimates considerably and believe the company is extremely well-positioned." DA Davidson - Buy, price target to $175 from $167 "While encouraged by management's comments that the supply-chain challenges had a less than expected negative impact on sales in the June quarter (for iPads and Macs); we were concerned by its indication that the iPhone (and iPad) revenues in the September quarter are expected to be negatively impacted." Needham - Buy, $170 price target "iPhone cycle is different this time. Strong double-digit growth for upgrades and for switchers also. Results strong for iPhone around the world- penetration on 5G is very low, but 5G is driving adoption at the high end, since folks expect to own their iPhones for 3 years and want to be ready for 5G, whenever it arrives." Goldman Sachs - Neutral, $140 price target "We find no fault in these numbers and continue to see Apple's execution here as exceptional given the size and scope of the company. It continues to be tough to believe these trends are sustainable but, for no