Wall Street analysts are raising their Apple targets after 'extremely clean' earnings report

Published Fri, Jan 28 20227:12 AM ESTUpdated Fri, Jan 28 202211:35 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

Apple 's latest quarterly report is gaining near universal praise on Wall Street, with many analysts now predicting bigger upside for the stock in the year ahead. Apple's fiscal first-quarter earnings report was strong across the board, with beats on the top and bottom lines and in every product category except iPad sales. The tech giant's services revenue rose 24% year over year. The stock, which closed at $159.22 per share on Thursday, was up nearly 4% in premarket trading Friday. Morgan Stanley's Katy Huberty, one of the top analysts on Wall Street, described the quarter as "extremely clean" and raised her price target to $210 per share from $200. Huberty has an overweight rating on the stock. "We believe that [Thursday's] results will help refocus investor attention on the value of Apple's ecosystem, and more specifically, user lifetime value," Huberty said in a note. Deutsche Bank's Sidney Ho, who has a buy rating on the stock, said the quarter should reinforce that Apple has pricing power, and he raised the stock's price target to $210 per share from $200. "AAPL also saw a ~330bps y/y improvement in Product gross margins, despite the inflationary component pricing environment, and this gives us confidence that consumers are continuing to shift more towards higher cost (and higher-margin) AAPL products," the Deutsche Bank note said. The quarter also impressed some of the more skeptical analysts. Toni Sacconaghi of Bernstein, who has a market perform rating on the stock, said in a note that the quarter reinforced the possibility for strong revenue growth in the years ahead. "While installed base is only growing single digits, Apple's ability to drive new customers, deepen penetration and introduce new services suggests that 15%-20% growth for the next few years may not be implausible," Sacconaghi said. Citi's Jim Suva, who has a buy rating on Apple, did not change his $200 price target but did say the quarter showed why the stock deserved to move higher. "Investors are too negative on Apple stock and view it as a COVID beneficiary that will see demand fall off as society eventually returns to more normalcy. However demand for Apple products and services is materially outpacing supply and when the supply chain normalizes then Apple's sales and margins will only accelerate higher, in our view," the Citi note said. Here are some other notable price target changes for Apple. Bank of America: $215 from $210 UBS: $185 from $175 Oppenheimer: $190 from $170 Barclays: $169 from $145 Canaccord Genuity: $200 from $185 Baird: $190 from $185 Atlantic: $200 from $190 Raymond James: $190 from $185 — CNBC's Michael Bloom contributed to this report.

Apple CEO Tim Cook attends the premiere for season two of the television series "Ted Lasso" at Pacific Design Center in West Hollywood, California, U.S. July 15, 2021.

Mario Anzuoni | Reuters

Apple's latest quarterly report is gaining near universal praise on Wall Street, with many analysts now predicting bigger upside for the stock in the year ahead.