It’s all about the guidance.
From a note to clients by Goldman Sachs analyst Simona Jankowski that landed in my inbox Wednesday:
What’s changed: We expect the market’s focus for Apple’s earnings report on Aug. 1 to be almost entirely on its guidance ahead of the much-anticipated iPhone 8 launch. While we expect F3Q (June) to be in line to slightly better, F4Q guidance has the potential to be highly volatile, depending on the exact timing of the launch. While Apple typically launches in 2H Sep, the potentially significant redesign of the new phone has given rise to concerns that shipments could be delayed to October due to supply chain bottlenecks.
Implications: To help investors infer the timing of iPhone 8 shipments based on F4Q rev. guidance, we review three scenarios:
- Apple guides below $48 billion: October launch
- Apple guides between $48B and $50B: Sept. 29 launch
- Apple guides between $51B and $53B: Sept. 22 launch
While the exact timing could increase near-term volatility, we recommend staying long Apple shares into the product cycle, as we see significant EPS upside in FY18.
Reiterate Buy and $170 price target.
UPDATE: For friend of the blog Dave Emery.