We only have one day before Apple (AAPL) releases its Q4FY18 earnings report. Will it fall far from the tree? The tech giant has seen growth in revenue year-over-year for seven consecutive quarters so far and gave guidance that suggested strong revenue growth for this quarter.
Monness top analyst Brian White believes even with all the good numbers, Apple stock is still underappreciated with a depressed valuation. The iPhone is for sure the company’s leading product, but Apple is still making waves in Services and White thinks a flowing holiday season is in store. In addition, the analyst believes the company will be rewarded for its strict stance on data privacy, (as echoed by Tim Cook during a speech in Brussels last week.)
“We believe Apple will at least meet our 4Q:FY18 revenue projection of $61.44 billion (up 17% YoY; Street is at $61.59 billion) and exceed our EPS estimate of $2.73 (Street is at $2.78). Our model reflects a 15% QoQ sales increase compared to an average rise of 10% over the past five years and a 16% uptick in 4Q:FY17. Recall, Apple guided for 4Q:FY18 sales of $60.0-62.0 billion,” White said.
White forecasts iPhone units to rise by 19% quarter-over- quarter and increase by 5% YoY to 49 million with iPhone revenue to grow by 23% YoY. Now for the computers – White predicts Mac units at 4.46 million, which is down by 17% YoY and iPad units of 10.58 million, which is up by 2%. White predicts Apple Services to grow 21% YoY. The analyst also predicts the positive trends for Apple Music and Apple’s paid subscriber base.
Looking ahead, the analyst forecasts sales of $90.43 billion (up 2% YoY) and an EPS of $4.62 for the first quarter of 2019.
Net-net, White reiterates a Buy rating on AAPL stock with a price target of $300, showing an upside of nearly 40%.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian White has a yearly average return of 16.1% and a 63% success rate. White has a 21.9% average return when recommending AAPL, and is ranked #85 out of 4,887 analysts.
Wall Street backs White’s bullish bite into the Apple, as TipRanks analytics exhibit AAPL as a Buy. Out of 35 analysts polled in the last 3 months, 24 are bullish on Apple stock, 10 remain sidelined, and only 1 is bearish. With a return potential of nearly 11%, the stock’s consensus target price stands at $242.29.