Financial Analysts: It’s Not Apple, It’s the World
02 MAY 2022 - Not a lot of needles moved in the wake of Apple’s record March-quarter earnings, though the ones that did move moved down. Well, most of them.
Apple 3.0 gathered a lot of notes from financial folk. It does not appear that anyone is worried about Apple’s performance. While it’ll do as good or better than whatever competitors it has, trouble in the supply chain, inflation, and Russia’s invasion of Ukraine are all happening on the same planet Apple’s on.
Piper Sandler analyst Harsh Kumar thinks Apple’s substitute for financial guidance “may be considered a disappointment for all the wrong reasons.” Those include stopping sales in Russia, foreign exchange headwinds, the “$4 billion to $8 billion headwind from COVID shutdowns in China,” and the same silicon shortage being faced by every company out there. According to Kumar, Apple’s “fundamentals seem to be headed in the right direction, but the short-term transitory impacts are distorting June quarter results.”
He’s still clapping for Tinker Bell, but - the sound of one man clapping, right? Piper Sandler has an “Overweight” rating on Apple shares. Kumar bumped his price target on the shares down from $200 to $195.
Thinking along a similar line is JP Morgan analyst Samik Chatterjee. Apple Insider highlighted his note. Quoting the site:
Despite the great execution in the March quarter, Chatterjee believes that the upcoming June quarter could demonstrate that the company isn't immune to difficulties in the macro environment. He believes there will be limiting factors on the execution-led upside in the June quarter.
Not that he’s not still into it. Continued “robust” iPhone demand - in this economy - is among the factors that keep him pleased. He’s got a positive rating on Apple shares and a price target of some sort. Friday’s Apple Insider piece says he moved his target from $200 to $205, though that seems wrong for several reasons. First, he’s talking about problems ahead, which sounds like a prelude to dropping targets, not raising them. Additionally, Back on 7 April, Apple Insider had a note from Chatterjee putting his price target at $210. Meanwhile TipRanks has Chatterjee’s Apple price target at $200 as of Friday… so… it is safe to say he has a price target on Apple shares. That target is, more than likely, $200.
Back now to Apple 3.0, which mentions two more lowered targets, without saying why. The excerpt the site ran from Morgan Stanley analyst Katy Huberty talked about not only what was great for last quarter, but also what’s great about the current quarter. Quoting her note:
June quarter demand commentary struck us as notably more positive than other consumer reports this earnings season, with underlying demand trends suggesting Y/Y revenue growth in the June quarter could be in- line to slightly stronger than the March quarter (of 9% Y/Y).
Huberty has an “Overweight” rating on Apple shares. Still, she knows what year it is. She’s lowered her 12-month price target on Apple shares from $210 to $195.
Offering no note of explanation, Apple 3.0 says Deutsche Bank analyst Sidney Ho lowered his 12-month price target on Apple shares. Used to be $210. It’s now an even $200.
I said earlier that most moving targets had moved down. Credit Suisse analyst Sami Badri inched his target up one dollar. Quoting his note:
Apple’s broader ecosystem is supported by Services & a growing installed base, while the company works through supply constraints. That said, increasing macro uncertainty and inflationary pressures will likely result in lower product demand during C2022
He’s got a “Neutral” rating on Apple shares. And yet - Apple 3.0 says he upped his 12-month price target the tiniest bit - from $168 to $169.
