In the wake of Apple’s latest earnings report, analysts have expressed a generally positive outlook on the stock. Bernstein highlighted Apple’s fiscal Q3 performance, noting that results were “modestly ahead of consensus.” They pointed out that revenues grew by 5% and services expanded by 14%. Bernstein also praised Apple’s strong free cash flow and its capital-light approach, which helps mitigate overinvestment risks. Analysts raised their EPS estimates for FY24 and FY25 and dismissed fears about Apple’s China business as being cyclical rather than structural.
Goldman Sachs noted the solid performance driven by iPhone and services in Apple’s latest earnings report. They emphasized that Apple’s channel inventory was at the low end of its target range, indicating strong demand. Goldman Sachs is optimistic about a multi-year replacement cycle for the iPhone, supported by robust service margins. Analysts highlighted Apple’s gross margin guidance for Q4, which could potentially set a September quarter record, reinforcing the potential for continued strong performance.
Piper Sandler observed that Apple’s June quarter results slightly exceeded expectations, driven by growth in iPad and services. Despite a decline in iPhone revenue year-over-year, the install base reached new highs. Piper Sandler remains cautious about the consumer market in the second half of the year but acknowledged management’s excitement about Apple Intelligence. They maintained a Neutral rating and a $225 price target, citing appropriate current valuation.
Wells Fargo deemed Apple’s earnings guidance as “good enough,” suggesting it may be conservative. They remain positive on the potential for a strong iPhone 16 upgrade cycle, supported by long-depressed upgrade rates and growing consumer familiarity with generative AI. Wells Fargo also highlighted improving performance in China and reiterated their Overweight rating with a $275 price target.
Bank of America expressed that “the best is yet to come” for Apple, emphasizing the potential for a multi-year iPhone upgrade cycle driven by Apple Intelligence. They noted improving trends across Apple’s portfolio and regions, with services setting an all-time revenue record. Bank of America sees potential upside in iPhone units, higher ASPs, and gross margins, reiterating their Buy rating with a $256 price target.
Analysts are generally optimistic about Apple’s future prospects. Despite some near-term challenges, Apple’s strong fundamentals, strategic positioning in AI, and services set the stage for continued growth and potential stock appreciation. Investors may find that Apple remains a solid investment opportunity in the tech sector.