wells-fargo-slashes-apple’s-price-target-by-10%;-expects-in-line-q3-results

Wells Fargo Slashes Apple’s Price Target By 10%; Expects In-Line Q3 Results

  • Wells Fargo analyst Aaron Rakers cut the price target on Apple Inc (NASDAQ: AAPL) to $185 from $205 and reiterated an Overweight ahead of quarterly results.

  • Based on his analysis of intra-quarter data points and checks, he expects Apple to report in-line Q3 results.

  • He thinks the company’s late-April guidance commentary likely adequately accounted for headwinds (including the impact of the supply chain crisis, lower China demand, FX impact, and paused shipments to Russia) during the quarter.

  • He modeled revenue/EPS at $80.8 billion/$1.14, slightly below the current consensus at $82.8 billion/$1.16.

  • Further, Rakers believes his below-consensus Q3 iPhone revenue estimate could prove conservative as he has seen what he would consider being some net-positive intra-quarter data points.

  • He saw some potential downside to his $10.2 billion Mac estimate (versus Street: $8.7 billion) following weak preliminary 2Q22 sell-in PC shipment data from IDC.

  • He continued to expect double-digit services growth in F3Q22 with some moderation.

  • The re-rating reflected Apple’s competitive differentiation and overall deepening product/services portfolio creating sustainable brand loyalty, strong balance sheet, and sustainable FCF generation, continually funding a solid capital return strategy, and the continued expansion of Apple’s recurring paid subscriber base.

  • Price Action: AAPL shares traded higher by 1.68% at $153.48 on the last check Wednesday.

Latest Ratings for AAPL

Date

Firm

Action

From

To

Mar 2022

Barclays

Maintains

Equal-Weight

Feb 2022

Tigress Financial

Maintains

Strong Buy

Jan 2022

Credit Suisse

Maintains

Neutral

View More Analyst Ratings for AAPL

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