Apple (AAPL) Stock Pops After Delivering Solid F3Q18 Report; GBH Analyst Weighs in


With its fiscal third-quarter earnings release, Apple (NASDAQ:AAPL) put to rest any concerns about its ability to continue growing its business. The iPhone maker’s already-robust revenue growth rate accelerated yet again in its third quarter, posting a strong 40% year-over-year increase in its earnings per share.

Specifically, total revenues of $53.3 billion handily beat the Street’s estimate of $52.3 billion while EPS of $2.34 came in above the Street’s $2.16 estimate. But the “star of the show” was better than expected FY4Q/September guidance. Apple is guiding to September total revenues between $60 billion and $62 billion compared to Street’s estimate of $59.5 billion.

Apple investors reacted positively to the earnings release, bidding up the stock nearly 4% to $197 in after-hours trading.

GBH analyst Daniel Ives commented, “In a nutshell, the Street is all focused on the demand trajectory for the September quarter and most importantly into 2019 with the trifecta of next generation iPhones on the horizon and the Street modeling iPhone shipments of roughly 220 million units, which could ultimately prove to be conservative in our opinion given the underlying demand drivers and the company’s initial guidance for the September quarter. We believe 350 million iPhones are in the “window of opportunity” to upgrade over the next 12 to 18 months with Apple needing to capture a majority of these units as part of this upgrade cycle to make a clearly successful iPhone product cycle in 2019 and lay the groundwork for future services/software growth and steady iPhone demand over the coming years. In a nutshell, after the heartburn seen from the earnings disappointments across tech bellwethers such as Facebook and Netflix over the last few weeks, Apple gave the Street and tech investors finally some good news with a clean June headline beat and stronger than expected outlook for the September quarter which is a positive data point for the iPhone product cycle demand heading into FY19.”

As such, Ives reiterates a Highly Attractive rating on Apple shares, with a price target of $200, which represents a slight upside potential from current levels. (To watch Ives’ track record, click here)

The initial word out on the Street echoes Ives’ bullish conviction on the tech giant, as TipRanks analytics showcase AAPL as a Buy. Based on 28 analysts polled in the last 3 months, 16 are bullish on the stock, while 12 remain sidelined. The 12-month average price target stands at $203.58, marking a 7% upside from today’s closing price.

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