All Eyes on Apple (AAPL) F2Q18 Earnings Show Tonight


Apple’s (NASDAQ:AAPL) long awaited fiscal 2Q18 results are now just around the corner. The iPhone maker will report quarterly results today after the closing bell, and Wall Street analysts are most concerned with iPhone sales and guidance. Let’s take a closer look:

BMO analyst Tim Long wrote, “We are reducing our FY18/FY19 unit estimates from 220 million/223 million to 209 million/214 million. We believe price elasticity is affecting the current cycle, as new models introduced cost, on average, over $100 more than last year’s new models. Additionally, we believe consumers are satisfied to hold onto their smartphones longer. Although we estimate iPhones get replaced more frequently than competitors’ phones, we believe replacement rates will continue to worsen,”

“We model revenue of $47.7 billion for the June quarter, well below consensus of $51.9 billion. Our estimate calls for revenue growth to slow to mid-single digits vs. low double digits in our prior assumptions. We expect continued strength in Services, up 17% y/y in June, and mixed performance in iPads and Macs,” the analyst added.

Mizuho analyst Abhey Lamba added, “Based on supply chain work by Yasuo Nakane and our Japan research team, we note: 1) full-year 2018 procurement estimates were lowered (vs. their February estimate) as iPhone X units move down by >30% on tepid n-t demand and potentially sooner-than-usual end-oflife; 2) iPhone 8/8 Plus unit estimates move lower as well (which could be incremental to current consensus expectations); 3) some unit upside to older models. Looking ahead, our conversations indicate limited new features in the upcoming product line-up, inhibiting differentiation in the high-end vs. current line-up. As such, we expect continued high-end inventory drain through F3Q.”

“We continue to see limited upside to 2018 iPhone unit shipment estimates amid muted upgrade activity. At around 14x NTM EPS estimates, we think the stock discounts n-t upside to previously announced capital return plans. Risk/reward looks balanced at current levels,” the analyst concluded.

For the long term, cautious optimism circles this tech giant, as TipRanks analytics exhibit AAPL as a Buy. Out of 28 analysts polled in the last 3 months, 17 are bullish on Apple stock, while 11 remain sidelined. With a return potential of nearly 17%, the stock’s consensus target price stands at $194.17.

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