Brian White Provides First Glance on Apple Inc. (AAPL) 4Q:FY17 Results

Apple jumps on strong earnings and guidance; Drexel Hamilton's Brian White cheers.


Apple Inc. (NASDAQ:AAPL) reported a solid quarter on Thursday, achieving substantial growth across all its product lines on the eve of one of the most anticipated iPhone launches ever. Specifically, revenue in the fiscal fourth quarter, ending September 30, rose 12% to $52.6 billion, from $46.9 billion in the same period a year earlier, topping the $51.76 billion expected on average among analysts. In addition, the tech giant’s earnings per share of $2.07 has surpassed Wall Street expectations of $1.87.

Looking ahead, Apple is guiding fiscal first quarter revenue between $84 billion and $87 billion with gross margins between 38% and 38.5%.

Drexel Hamilton analyst Brian White commented, “We are very pleased with Apple’s 1Q:FY18 outlook and especially in light of the supply constraints around the iPhone X […] Using the midpoint of Apple’s 1Q:FY18 outlook, we calculate EPS of approximately $3.71 (Street is at $3.81). We are projecting 1Q:FY18 sales of $84.86 billion and EPS of $3.65.”

The analyst continued, “Apple is taking the iPhone franchise to a whole new level with the iPhone X, pushing the company deep into the ultra-luxury smartphone market with the highest priced iPhone in the company’s history. With a strong start to the iPhone X, combined with an excellent 4Q:FY17 report and trading at under 13x our CY:18 EPS estimate (ex-cash), we believe Apple has attractive upside over the next 12 months.”

As such, White reiterates a Buy rating on Apple shares with a price target of $208, which implies an upside of 24% from current levels. (To watch the analyst’s track record, click here)

The rest of Wall Street echoes White’s bullish play, as TipRanks analytics exhibit AAPL as a Strong Buy. Out of 28 analysts polled in the last 3 months, 22 are bullish on Apple stock while 6 remains sidelined. With a return potential of nearly 6.5%, the stock’s consensus target price stands at $179.

Apple CEO Tim Cook commented, “We’re happy to report a very strong finish to a great fiscal 2017, with record fourth quarter revenue, year-over-year growth for all our product categories, and our best quarter ever for Services […] With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we’re looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device.”

Apple CFO Luca Maestri added, “Apple’s year-over-year revenue growth rate accelerated for the fourth consecutive quarter and drove EPS growth of 24 percent in the September quarter […] We also generated strong operating cash flow of $15.7 billion and returned $11 billion to investors through our capital return program.”