From a note to clients by Matthew Cabral that landed on my desktop Tuesday:
Looking ahead to C2H, the upcoming 5G launch is a key focus area for the stock; while visibility has likely improved vs. 90 days ago, we think Apple may once again choose to not provide quarterly guidance given continued uncertainty around launch timing amid COVID disruption. Our base case factors in an October launch date (~1mo later than typical) and while we do not view a short-term pushout as a big deal for the stock, it has the potential to distort typical seasonality in 2H (CSe ~$3bn below Street revenue in C3Q, ~$5bn above in C4Q).
We’re bullish on 5G driving upgrade momentum over time, but remain more guarded on the cycle out of the gate given (1) limited coverage / capacity, (2) the lack of a robust 5G app ecosystem at this stage, and (3) lingering macro headwinds that we think weigh on consumer demand for bigger-ticket discretionary items. With Apple now at 25x our CY21 EPS (>3 std devs above 5-yr avg) and trading at a 14% premium to the S&P 500 (~2.5 std devs above 5-yr avg), we remain on the sidelines.
Maintains Neutral rating, raises price target to (soggy) $340 from (deep underwater) $295.
My take: Stay on the sidelines, never apologize.