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Apple stock has risen around 50% so far this year.
Dhiraj Singh/Bloomberg
With
Apple
scheduled to report earnings later this week, Wall Street analysts continue to tweak forecasts and ratchet up their target prices to keep up with the stock’s 50% rally in 2023.
On Tuesday, at least two analysts lifted their target prices on Apple stock (ticker: AAPL), anticipating the $3.1 trillion company can continue to expand its valuation from here. Apple reports earnings after the close of trading Thursday.
TD Cowen analyst Krish Sankar repeated his Outperform rating on Apple shares, while boosting the company’s price target to $220 from $195. Apple shares on Tuesday were down fractionally at $195.88.
Sankar sees June quarter revenue down 2% year over year, with a rebound to 1% growth in the September quarter. His view is Apple continues to see “moderate headwinds” in its hardware businesses because of macroeconomic conditions, with iPhone demand stable.
The analyst, however, contends that Apple remains a “defensive name,” and sees the company as an eventual artificial intelligence winner. Neural networking capability in the company’s processors “supports inference capabilities for iPhone and Mac and offers investors exposure to future AI trends,” Sankar writes.
Baird analyst William Power, likewise, keeps his Outperform rating, while lifting his target price to $204 from $180. Power expects Apple to report “solid results” for the quarter, but also cautions that the company’s shares already trade near record highs.
Immediately after earnings, attention will likely redirect to the launch of iPhone 15 and the company’s next smartphone cycle, Power says. He notes that historically Apple shares outperform from mid-August to mid-September. But with the stock trading at a historic valuation peak, he would be an aggressive buyer “on any pullbacks.”
For the fiscal third quarter, analysts expect Apple to report sales of $81.9 billion, down about 1% from the year-earlier quarter, with earnings of $1.19 a share, down a penny from a year ago.
The Street projects $40.3 billion in sales for the iPhone, which would be down about 1%, according to FactSet, with Mac sales of $6.6 billion, and iPad sales of $6.5 billion, both off about 10%. Those declines are expected to be offset by the “wearables, home and accessories” category, with estimated sales of $8.3 billion, up 3%, and Services revenue of $20.8 billion, up 6%—though down fractionally from the March quarter.
Write to Eric J. Savitz at [email protected]
Source: https://www.barrons.com/articles/apple-stock-price-earnings-d159c85d?siteid=yhoof2&yptr=yahoo