Penultimate Guesstimates Ahead of Apple Earnings
Bernstein Research analyst Toni Sacconaghi - Image via CNBC
Bernstein’s Sacconaghi Sees Apple Beating Earnings, But…
The march to Apple’s Marc-quarter FY2022 earnings continues, with financial analysts throwing darts. We start with Bernstein Research analyst Toni Sacconaghi, who’s kind of making sense.
You read that right.
Apple 3.0 ran part of a note he wrote, wherein he says he sees potential upside in tomorrow’s numbers. According to the Sacconator:
iPhone shipments (particularly in China) remained strong, and supply constraints eased, allowing Apple to whittle down backlogs and replenish inventory.
That’s got he and his expecting revenue and EPS that are just a tiny bit ahead of the Street. Of course, there are things to worry about - partly because of the state of the world and partly because it’s Bernstein Research analyst Toni Sacconaghi. Potential points weighing on the minds of investors:
(1) lock-downs and restrictions in China that are impacting Apple’s suppliers/ manufacturing partners; (2) Apple’s withdrawal from Russia (estimated 2%+ of iPhone revenues); (3) material appreciation in the dollar (-180 bps incremental headwind to 2H revenues vs. 90 days ago) which could also impact gross margins; (4) reports of sluggish demand for iPhone SE & Airpods; (5) the overall health of the consumer, especially in Europe.
Beating expectations will be key, in Sacconaghi’s estimation, as will something like upbeat guidance. Not guidance, but something like it.
Sacconaghi has a “Market-Perform” rating on Apple shares. His price target on the shares in $170.
I’ve gotta say, I don’t think Sacconaghi is making a new kind of sense. I think the world has just hit a level of “Eeyore” that makes Sacconahi sensible. Somebody should do something about that.
See Also Cowen & Co.
Thinking along similar lines as the Sacconator is Cowen & Co. analyst Krish Sankar. Apple Insider writes up a note he wrote. He is also expecting a solid earnings report from Apple and he is also cautious about what’s around the corner.
For last quarter, Mac looks good, iPhone looks good, Services look good, though he expects revenue to show up flat “because of pandemic disruptions to consumer behavior and the lack of new game approvals in China.” For this quarter, Apple Insider has Sankar arguing that “softer iPhone SE demand and lockdowns in key Chinese manufacturing cities could present a risk to Apple's bottom line…”
That said, he is still a fan. Sankar has an “Outperform” rating on Apple shares. His price target on the shares is $200.
Countdown to Call Time
A few more notes like these seem likely between now and tomorrow. After Thursday afternoon, it’s all hindsight. That is when Apple will post and host numbers and a call. Earnings for last quarter will hit Apple’s site after the closing bell at 1:30 Pacific/4:30 Eastern on Thursday 28 April. Then, Apple execs and financial folk will do the conference call thing. That goes off at 2PM/5PM. You can hear that as it happens on Apple’s Investor site. Apple will make it available as a podcast soon after. And - of course - we will recap the call here, on Friday 29 April.
