Analyst Amit Daryanani points to April 28 and Apple's fiscal Q2 earnings call as the "main catalyst."
From a note to clients that landed on my desktop Wednesday:
Rational for tactical call: We are adding Apple to our Tactical OP list as the company looks well positioned to report upside to Mar-qtr estimates driven by iPhone and Services strength despite the ongoing supply disruptions.
While the supply chain issues are real, we expect Apple will be relatively protected by its status as one of the largest electronics purchasers in the world.
Note, Foxconn (key AAPL EMS partner) has called out these issues but indicated the shortage would impact less than 10% of customer orders.
Mar-qtr numbers should be strong with Chinese iPhone shipments +185% in the first two months of the quarter and the App Store reporting +32% growth in the Mar-qtr (vs. street modelling services deceleration).
Foxconn also indicated that Mar-qtr revenue should outperform seasonality, which is consistent with Apple’s guide for iPhone revenue to be down less than typical seasonality.
Services growth was guided to decelerate after a very strong +30% y/y in the Dec-qtr, but we see potential for y/y growth to stay flat or even accelerate given the very strong App Store performance.
Net/Net: AAPL is positioned to report sizable upside vs. expectations for March-qtr and guide June-qtr inline to somewhat ahead of expectations. Long-term, AAPL is positioned to sustain mid/high single digit sales and low-teens EPS growth on a secular basis.
Maintains Outperform rating and Street-high $175 price target.
My take: I wondered when the Apple analysts would wake up and start waving the Q2 earnings flag.