Apple (NASDAQ:AAPL) is up slightly premarket Friday following results that topped expectations.
Shares are up 1% before the bell.
Caution on the holiday season kept gains in check. But analysts saluted the resilience in shares.
Evercore analyst Amit Daryanani, maintained his Overweight rating on the stock, calling AAPL the “Last FAANG Standing” after selloffs from the other megacaps this week.
“We think AAPL remains uniquely positioned to sustain mid/high single digit sales and low/mid-teens EPS growth on a multiyear basis with levers for EPS upside being – GM expansion from easing supply chain, OPEX controls and buybacks,” Daryanani wrote in a note.
Moderation in services revenue should be offset by upside to iPhones, J.P. Morgan analyst Samik Chatterjee, who also has an Overweight rating, said. He sees a premium multiple to the current 23x, with “resilience to a tough macro through the mix of Products and Services likely to drive a re-rating.”
Citi’s Jim Suva maintains his Buy on AAPL and lists five reasons the stock can trade higher: improving services growth, material expansion opportunity in India, a foldable iPhone, the company is still growing and platform expansion.
“The amount of investor negativity on mega cap tech stocks, especially Apple, is well known as recent surveys show Apple as the least favored stock amongst its peers,” Suva said. “Yes there are valid concerns of electronic retailers working down inventory and consumers having less disposable income given inflation but we believe consumers will adjust their spending allocations and continue to spend on Apple’s growing platform of products and services.”
On the less bullish front, Bernstein sticks with its Market Perform and sounds concern about 2023.
“Apple did not provide guidance for December revenues, other than to say growth would be lower than Q4 levels (of 8%),” analyst Toni Sacconaghi, Jr. wrote. “Our take is that AAPL does not have conviction that it can grow revenues in FY Q1 – despite enjoying an extra week that should contribute an additional ~ 700 bps of revenues – in part because of uncertainty surrounding iPhone 14 and wearables, which it continues to believe is its most economically sensitive business.”
SA contributor Livy Investment Research says investors should keep their eyes on services for AAPL.