Posted By RichC on January 28, 2016
The stock market continues to move in favor of the “bears,” which goes against most long term savers and investors. One of the biggest stories today was that of Apple Inc $AAPL who reported earning of $3.28 per share which was 4 cent higher than the consensus. Revenue was nearly $76 billion and short by nearly $1 billion. As one would expect this slowing (based heavily on the slowest pace ever for iPhone sales) had $AAPL down 6.5% closing at near the 52-week low at $93.44.
Who knows how low Apple will trade in the coming days, but several advisors have “buy” ratings and targets substantially higher than $AAPL current levels. I hope I won’t regret picking up a few more shares at these levels.
Drexel Hamilton’s Brian White reiterated a Buy rating and $200.00 price target on the stock. He was glad to see the quarter end, adding that it was time to move on and “start to look forward to the ramp of iPhone 7.”
White also pointed out that the company’s 40.1 percent gross margin beat his estimate of 39.7 percent, while the 31.9 percent operating margin came in ahead of his forecast of 31.1 percent.
“Given the iPhone weakness in the late stages of this 6-Series, it is not surprising that Apple’s 2Q:FY16 outlook is soft,” he continued, noting the iPhone 7 cycle is now on the horizon.
Related Link: What’s Wrong With Apple…And What Tim Cook Can Do To Fix It
Canaccord’s T. Michael Walkley said Apple’s results were consistent with the firm’s estimates, and reiterated a Buy rating and $146.00 price target. The analyst attributed the “solid” results to robust iPhone sales and sustained growth in services. In fact, Apple sales would have surged 8 percent year-over-year in constant currency, but currency headwinds weighed on the results.
Despite his optimism, Walkley noted that “given the similar form factor for the iPhone 6S and softer smartphone global demand trends,” the firm anticipates “weaker and down year-over-year 1H/C2016 iPhone sales.”