As Apple Inc. heads toward the anticipated launch of its first 5G-enabled phone later this year, the company only gave a confident signal that its hardware is still in high demand during a global pandemic.
Apple shares AAPL,
hit another record on Friday, with the stock crossing the $ 400 mark for the first time and eventually gaining 10.5% as analysts applauded the company’s “incredibly strong” earnings results. The smartphone giant easily withstood the pandemic in its June quarter, according to a Thursday announcement, generating revenue of $ 59.7 billion that comfortably topped estimates even earlier this year, before analysts They will cut their forecasts to account for closed stores, weaker budgets and other COVID-19 impacts.
See more: Apple beats earnings and announces stock split, sending shares to record levels
“Apple’s results were astonishingly strong and when one considers the COVID-19 pandemic it is even more impressive,” wrote Citi analyst Jim Suva, who reiterated a buy rating on the stock and raised its price target to $ 450 from $ 400.
Piper Sandler analyst Harsh Kumar took a similar view.
“Overall, the pandemic appears to have limited impact on Apple,” he said in a note to customers. “In fact, it can be argued that the Mac and iPad are really benefiting very well because of work from home and distance learning trends.”
Mac revenue increased to $ 7.1 billion from $ 5.8 billion, while iPad revenue increased to $ 6.6 billion from $ 5 billion.
Kumar met the company’s expectations for a strong back-to-school season this year and raised its target price to $ 450 from $ 310, maintaining an overweight rating on the stock.
RBC Capital Markets analyst Robert Muller wrote that the iPhone SE helped Apple reach a new record in its installed base, contributing to the smartphone trends that make it “continue to gain confidence behind Apple’s ability to generate recurring cash flows from your loyal customer base. “
Muller is optimistic about smartphone trends in the coming quarters, even when Apple confirmed that its next phone will be delayed “a few weeks” compared to last year, when it started selling its new models in late September. That will push the next iPhone launch into Apple’s next fiscal year, which begins in October.
“Recall that the iPhone X, a highly anticipated form factor update, was released in early November and generated a still record quarterly revenue result for the iPhone,” he wrote. “Despite anticipation of a 5G update, Apple expects the iPhone’s recent performance (which exceeded expectations) to continue for the next quarter.”
It rates the stocks with a higher return while raising its target price to $ 445 from $ 390.
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JP Morgan’s Samik Chatterjee wrote that Apple “surprised even the bullish expectations that were approaching F3Q / C2Q gains by not missing a beat,” and was optimistic about management’s tone when looking at the current quarter.
“Overall, Apple’s ability as a company in a consumer discretionary product segment completely counteracts the sequential slowdown in F3Q / C2Q despite the massive outage speaks volumes about the utility associated by consumers with products, as well as driving a product cycle, leading them to be willing to circumvent the traditional practice of buying from the physical channel when necessary, and leading us to be more optimistic about the next cycle of 5G products, “wrote Chatterjee , who has an overweight rating on the stock and who raised his target price to $ 460 from $ 425.
Chatterjee said Apple also has an “unappreciated business opportunity” as more people use Mac and iPad for remote work.
While strength was expected in the quarter, led by management’s guidance in the latest earnings call, the guide to the unit’s growth trends to stay in the F4Q will likely surprise investors as most expected make it a unique tailwind for these products, “he wrote.
Canaccord Genuity’s T. Michael Walkley was also encouraged that the company expects double-digit growth for all hardware categories except the iPhone in the September quarter, and praised the “explosive” results for the period. June, while raising its target price to $ 460 from $ 440 and maintaining a buy rating on the stock.
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At least 19 analysts raised their Apple stock price targets after the report, according to FactSet, and the new average target is $ 397.65. Of the 38 analysts tracked by FactSet that cover Apple’s shares, 26 rate it as a purchase, eight rate it as a hold, and four rate it as a sale.
Apple plans to do a four-way split for one of its shares, which will impact registered shareholders starting August 24. The stock will begin trading in a split split on August 31, a move Citi Suva said “is important to retail investors.” Apple said the stock split aims to make stocks “more accessible to a broader base of investors.”
Shares are up 39% in the past three months as the DIA Jones Industrial Average DJIA,
It is up 8%.
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