Analysts React to the WWDC Keynote
08 JUNE 2022 - On a services-heavy or hardware-heavy Apple event, financial analysts might move their price targets or even their ratings on Apple shares. Monday was not that kind of day. No changed ratings nor altered price targets. Still, a few analysts had some interesting reactions.
It wouldn’t be correct to say that Morgan Stanley analyst Katy Huberty was disappointed in Monday’s keynote. That said, she did note a lack of meaningful mentions of protecting user privacy during the event. She also noted the lack of hints around Apple’s AR/VR plans. Additionally, she expressed surprise around the move to M2 and the update of the 13-inch MacBook Pro. It’s hard to imagine she hadn’t heard the rumblings, yet checks by her team “were unclear on timing of the M2 introduction,” according to her note.
That said, she seems to have liked a lot of what she heard. While AR was nowhere to be found, she thinks she’s seen the outline of Apple Car. Apple Must quoted part of her note, addressing Apple’s CarPlay announcement. Quoting that bit:
We believe this update is significant because it puts the Apple ecosystem at the center of the auto software experience in a way it hasn’t before – becoming more like a carOS than just one available app on a center-console display. We believe this is likely one part of Apple’s path towards developing a car operating system and could be a small taste of what’s possible with a potential Apple Car project…
Meanwhile, a piece from Apple 3.0 had Huberty saying:
… [the] WWDC keynote once again brought out what we believe is the most compelling characteristic of the company – Apple’s deep focus on in-house hardware and software innovation combined with an increasing set of features that allows Apple’s platform of products and services to function more uniformly, ultimately providing an unmatched, and unreplicable, user experience.
Huberty has an “Overweight” rating on Apple shares. Her price target on the shares is $195.
Wedbush analyst Daniel Ives seemed of two minds on the keynote, both of them pleased. While the “highlight” was the news around iOS 16 in his estimation - specifically Apple Pay Later, “the biggest announcement of the day was unveiling two new MacBook models using Apple’s new and innovative M2 chip,” according to the analyst. He was actually on CNBC making that case midday Monday. Ives actually posted a clip of himself on CNBC to Twitter. There he said:
Apple has more control over its ecosystem. It’s no longer just waiting for Intel to pick up the phone. They’re beating Intel at their own game. It’s a negative for Intel. It’s another gut punch…
Saying that M2 gives Apple more control over its ecosystem and - on the business side - better margins as well, he added:
…that’s another tale and that’s why this is so important. Remember the haters that say that innovation is in the rear view mirror. Look at M2. They’re beating chip companies at their own game.
That is two big votes for innovation at Apple. Ives has an “Outperform” rating on Apple shares. His price target on the shares is $200.
Evercore analyst Amit Daryanani ran a list of top “6” Takeaway’s from Monday’s keynote. Pulling out three of those:
Apple is adding live sports scores and standings to Apple News which will effectively make the News app a competitor to popular sports scores apps like ESPN and CBS Sports. This likely won’t get much attention but we think it is meaningful as News is one of the only platforms where Apple sells advertising space, and we continue to think Live Sports is a sizable opportunity.
Apple Car Play remains an underappreciated platform and the new changes signal greater integration with the real time operating systems used by automakers. This will expand Car Play to all the information displays in the vehicles rather than just the infotainment screen.
The MATTER smart home standard will be officially launched, enabling interoperability between Apple smart devices and other major manufactures (Google, Amazon, etc).
Most of the rest of the list was computers and processors. “Net/net,” wrote the analyst:
The event announced features that should accelerate numerous growth vectors including Apple Pay, Apple Sports, and Apple Car while also building upon Apple’s best in class operating systems and silicon.
Daryanani has an “Outperform” rating on Apple shares. His price target on the shares is $210.
