All Eyes On Apple Inc. (AAPL) And Exxon Mobil Corporation (XOM) Ahead Of Earnings This Evening

All investors await with bated breath to see how Apple Inc. (NASDAQ:AAPL) and Exxon Mobil Corporation (NYSE:XOM) will shake Wall Street tonight, with Apple on the brink of posting its fiscal first quarter results of 2017 and Exxon raring to release its fourth-quarter earnings.

Two analysts echo bullish sentiments with regards to Apple’s upcoming print, with excited buzz surrounding the forthcoming September launch of the iPhone’s 10th model, dubbed across the tech-verse as “X.” Conversely, one analyst tiptoes with more caution around Exxon after two weak spots in terms of back-to-back quarters, but with a rise in encouragement for what to expect for the fourth quarter.

Let’s take a closer look:

Apple’s Success and Growth for the Next 6 to 9 Months Hinge Upon the “X” Factor

Drexel Hamilton analyst Brian White paints an upbeat picture on Apple ahead of the print: one of fulfilled or outclassed expectations and a comeback kick for growth.

As such, the analyst reiterates a Buy rating on shares of AAPL with a $185 price target, which represents a just under 53% increase from where the stock is currently trading.

For the first fiscal quarter, the analyst is calling for $77.61 billion in sales, which denotes a 2% year-over-year rise, slightly ahead of the Street’s $77.12 billion; an expectation, which he anticipates the giant will either meet or beat. White’s projection denotes a 66% quarter-over-quarter increase, bolstered by an added week, and is over the five-year average quarter-over-quarter growth of 59% over quarters this time in previous years. However, the analyst notes the estimate also falls under the 77% growth during this quarter two years ago, thanks to the stellar performance of the iPhone 6 and iPhone 6 Plus in the past.

Meanwhile, the analyst has even more positive approach to AAPL’s EPS this quarter, predicting a beat for his estimate of $3.22, which is just over the Street’s estimate of $3.21. Additionally, White points to the tech giant’s guidance, which set expectations for sales to hit $76 to $78 billion with implied EPS circling $3.17.

White believes there was an iPhone cycle bottoming out phenomenon in the second quarter of the fiscal year of 2016, which showcased a 16% dip year-over-year, but affirms that the iPhone 7 and iPhone 7 plus can return the tech giant to its unit growth glory days for this quarter. This is considering that the past three quarters revealed a decline in growth. White estimates AAPL will bring 76 million in iPhone units for this quarter, which would reveal a 67% quarter-over-quarter rise.

Less positively, “Although we believe Apple will benefit from the iPhone 7 launch in China, we expect Greater China revenue to fall by 20-30% YoY in 1Q:FY17 and decline by 5-10% in FY:17,” opines White.

Though largely bullish, the analyst’s preview of the tech giant is not without apprehension, as he ventures, “For iPad, we are modeling 15.5 million units (down 4% YoY) in 1Q:FY17 but our estimates could be at risk. For Services, we are modeling revenue of $6.45 billion and believe Apple could beat our projections. Finally, we believe Apple Watch enjoyed a strong holiday season and AirPods (available 12/13) got off to a strong start.”

Lastly, the analyst posits, “Rising FX headwinds and the seasonal volatility after a new iPhone ramp will likely play into the company’s outlook.”

Overall, “In 1Q:FY17, we look for Tim Cook to make Apple grow again on the back of the iPhone 7 and a happy holiday season, while we look forward to the launch of the iPhone “X” in September 2017. Finally, the potential for more favorable tax repatriation policies could be a positive catalyst for Apple and we recommend a 3.5-4% dividend yield. In our view, Apple remains one of the most underappreciated stocks in the world,” White contends.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Brian White is ranked #180 out of 4,370 analysts. White has a 61% success rate and earns 8.8% in his annual returns. When recommending AAPL, White yields 20.8% in average profits on the stock.

In a separate, but also bullish corner, BMO analyst Tim Long likewise is betting on Apple with full confidence, reiterating an Outperform rating on AAPL with a price target of $135, which represents a close to 12% increase from current levels.

Long’s expectations surpass that of consensus, as he notes, “Our iPhone unit estimates are 3 million/2 million above consensus for results and guidance, respectively, though we believe investor concerns are currently more focused on gross margin guidance. Our FY2017/2018 EPS estimates are $9.05/$9.89, compared with consensus of$8.92/$10.05, respectively.”

For the fourth quarter, Long projects EPS will reach $3.27, above the Street’s $3.22. Moreover, the analyst models a much more confident revenue forecast than that of consensus, which he attributes to robust iPhone revenue performance. Yet, the analyst adds, “Our gross margin guidance of 38.4% is slightly below the Street’s 38.5%, though our lower opex view more than offsets the difference.”

Ultimately, from Long’s eyes, the iPhone machine is “still key” for the tech giant, concluding, “We model 80 million iPhones in the December quarter compared with the consensus estimate of 77 million, which has been slipping in recent weeks. We are also above the Street with 55 million in the March quarter, having raised numbers last month on better post-iPhone 7 launch impressions. Discussions are starting for this year’s iPhone refresh. We believe the expected success of the new models will be the main determinant of AAPL stock success over the next six to nine months.”

According to TipRanks, four-star analyst Tim Long is ranked #517 out of 4,370 analysts. Long has a 61% success rate and realizes 7.6% in his annual returns. When rating AAPL, Long gains 17.3% in average profits on the stock.

TipRanks analytics indicate AAPL as a Strong Buy. Out of 32 analysts polled by TipRanks in the last 3 months, 27 are bullish on Apple stock and 5 remain sidelined. With a return potential of nearly 14%, the stock’s consensus target price stands at $137.75.

Exxon Stumbled the Past 2 Quarters, but 4Q to Bring Silver Lining

J.P. Morgan analyst Phil Gresh is particularly intrigued to see how Exxon improved in its fourth quarter, considering surprise left curveballs thrown at the firm in its past two consecutive quarters. Cautious, yet with renewed optimism, the analyst reiterates a Neutral rating on XOM with a price target of $94, which represents a 12% increase from where the shares last closed.

Gresh explains, “After uncharacteristically tough quarters in 2Q and 3Q, we expect a better result from XOM in 4Q. Upstream should be aided by XOM’s higher exposure to natural gas, particularly in Europe, and improving LNG prices. Downstream could also benefit from better international trends, even if domestic trends are tough. Finally, we do not expect a recurrence of the 3Q CFO headwinds.”

Looking ahead, “We expect the recent $5.6-6.6B Permian acquisition to be a key focus on the call, around which we think the company could provide more color on its broader shale outlook moving forward. We would also expect commentary around the CEO transition to be another focus, with a more thorough strategic update at the analyst day. The company might also give 2017 capex guidance, which could be positive based on recent trends,” continues the analyst.

However, “The one negative overhang remains the possibility/magnitude of any potential write-downs, though the stock has clearly lagged peers, suggesting that some of this may already be priced in,” Gresh surmises.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Phil Gresh is ranked #1,009 out of 4,370 analysts. Gresh has a 65% success rate and garners 7.7% in his annual returns. When rating XOM, Gresh secured 0.0% in average profits on the stock.

TipRanks analytics exhibit XOM as a Hold. Based on 8 analysts polled by TipRanks in the last 3 months, 6 maintain a Hold on XOM stock while 2 issue a Sell. The 12-month average price target stands at $86.29, marking a nearly 3% upside from where the stock is currently trading.

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