- Apple (NASDAQ:AAPL +0.3%) is up slightly after beating FQ2 estimates, offering in-line FQ3 guidance, and upping its dividend and buyback authorization. At least 9 firms have hiked their targets; no upgrades or downgrades have arrived.
- Brean's Ananda Baruah (target hiked to $170) thinks Street estimates remain "materially low" through 2017, given iPhone unit growth, the margin boost provided by a mix shift towards iPhones and (within iPhone sales) the 6+, and operating expense leverage. He forecasts iPhone shipments and EPS respectively rising to 285M and $12.73 by FY17 (ends Sep. '17).
- Citi's Jim Suva, who added Apple to Citi's Focus List 4 weeks ago, still sees carrier upgrade plans, low multiples, margin expansion, Apple Pay/Passbook, and enterprise growth acting as catalysts. Canaccord's Mike Walkley (target hiked to $155) sees the iPhone installed base growing to 500M this year.
- Those offering more cautious takes often question the sustainability of iPhone growth. Nomura states sales growth in developed markets appears to have fallen in half in FQ2, and expects Chinese growth to slow the way Japanese growth has. Raymond James' Tavis McCourt (recently downgraded to Market Perform) also expects slowing iPhone growth, and (given a $171B+ offshore cash balance) thinks major foreign acquisitions are possible in the absence of a tax holiday.
- Returning to Twitter after a 5-week hiatus, Carl Icahn says he still considers Apple "undervalued and misunderstood," and expects to "put out another in-depth report within two weeks." His last report (involved a $216 target) was published in February.
- Prior Apple earnings coverage, CC transcript