With Apple at $119, Goldman Sachs sticks with $75 price target

From a note to clients by analyst Rod Hall that landed on my desktop Wednesday:

We summarize our key takeaways from Apple’s latest 10-K in this short report as well as a few more pieces of analysis. We take a look at disaggregated Services growth rates in the quarter using Google’s disclosure as well as SensorTower data and find that non-TAC/App Store Services growth likely decelerated from peak growth in the March quarter. However, we note that Apple One services bundles became available on October 30 and could drive an uptick in this growth rate in the December quarter. We also note that App Store growth was again a very healthy estimated 31% in FQ4 to September and we also estimate that TAC payments likely contributed substantially to both Q/Q and Y/Y growth as web advertising revenues increased. From the 10-K we look at directional indications that Apple provides by geography for iPhone sales and see a mixed picture of growth in FY20. We also do our normal deep review of the 10-K but most of our other findings are consistent with what we would expect from the later timing of the iPhone launch this year…

Our 12-month price target of $75 is based on 21x our Q5-Q8 EPS forecast of $3.55. Key upside risks include better-than-expected iPhone demand, stronger demand for Wearables, better-than-expected Services growth, OpEx reductions, and significantly outsized buybacks and meaningful dividend increases.

Maintains Sell rating and (deep underwater) $75 price target.

My take: Hall the is the only Apple analyst I know who writes about the company in terms of “upside risks.”

See also Apple 3.0’s Rod Hall archives.

13 Comments

  1. Ralph McDarmont said:
    Goldman must employ Rod Hall just for the clicks he generates by being stupid. Can you imagine how broke we would all be if we followed Rod’s view? He is a disservice to GS clients.

    4
    November 18, 2020
    • Alan Birnbaum said:
      Good ‘ole Rod. The most dependable contra indicator of AAPL’s success. If he lived a 100 years ago, he would have praised the Titanic’s seaworthiness !

      4
      November 18, 2020
    • Frank Pedron said:
      An anagram of Rod Hall solves as “Ah Droll”.

      Is it possible Goldman might be keeping Rod around just for giggles?

      Maybe for some profit, too?

      3
      November 18, 2020
  2. bas flik said:
    if you are short you face upside risks.

    6
    November 18, 2020
  3. bas flik said:
    samsung s21 introduction will be 2 months earlier in jan. 2021 instead of march. probably to fight iphone 12 success…..

    0
    November 18, 2020
  4. David Emery said:
    For a long time, Hall was an embarrassment to Goldman. Now he’s a reflection on Goldman’s lack of corporate accountability. I don’t understand why Apple does business with Goldman if they continue to employ this crook.

    2
    November 18, 2020
  5. Alan Birnbaum said:
    OT, Apple decreases fees in App Store. Comments ?

    1
    November 18, 2020
      • Ralph McDarmont said:
        Apple is running a business, not a charity. If the fees dropped to zero the grandstanding congressional fools would still demand more. Beating up on tech is today’s fashion statement in DC. At the same time the critics are texting, emailing, Tweeting and streaming porn.

        2
        November 18, 2020
        • David Emery said:
          Epic’s suit makes it clear: The critics want to set up their own stores to get the fees, and want Apple to take $0 fees from the app developer. It’s not clear what Apple could do to please most of these critics (with respect to App store fees. We do know what much better more transparent review policies are needed.)

          0
          November 18, 2020
  6. Fred Stein said:
    Per Yahoo finance, Apple’s FY ’21 EPS: Avg = $4.33, High = $5.03 and Low = $3.55.

    That explains Rod’s “upside risk”.

    0
    November 18, 2020
  7. Michael Goldfeder said:
    I going out on a limb here, but if I spent the fee I’m wondering if Ancestry.com would be able to confirm whether or not Rod Hall is related to the Woody Allen movie character; Annie Hall?

    0
    November 19, 2020

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