Bernstein’s Toni Sacconaghi: Apple is down because the bar was high (video)

“This is the third quarter where Apple has absolutely annihilated consensus expectations.”

From CNBC’s “What this research analyst thinks of Apple’s earnings report” which aired early Wednesday: 

My take: Classic Sacconaghi. CNBC still calls him a “top analyst,” but in my book he’s usually near the bottom.

26 Comments

  1. David Emery said:
    What a crock of bovine effluent! ANALysts, particularly this talking butt, have demonstrated no ability to understand and predict AAPL prices. When AAPL pounds them into sand, they go back and blame the company for being “too successful.” WHY DO PEOPLE LIKE TONI GET AWAY WITH THIS?

    8
    July 28, 2021
    • Aaron Belich said:
      Because his bs drives clicks.

      It’s why it may be better for us and for the downfall of Toni if everyone stopped sharing this crap.

      4
      July 28, 2021
  2. Aaron Belich said:
    What a crock of %}€>|! They took all the wrong things from Tim and Luca, and amped them.

    And he’s still labeled as a ‘top analyst for Apple’.

    What a bunch of maroons.

    5
    July 28, 2021
  3. Jerry Doyle said:
    It’s this same crap about “sustainability” going forward. Each quarter Apple blows the barn doors off and WS says, “…yes, but can you do it again next quarter?” WS and Toni Sacconaghi still views Apple as an iPhone company. Then Toni & WS analysts moved in like bottom feeders and exploit Luca’s caveat that Services, which reached record high levels this quarter, will self correct next quarter to more typical levels. So, Apple remains an iPhone company to them and they see the 5G super cycle ending.

    If Apple is not going to give forward guidance, then Apple shouldn’t be talking about what they see happening in different revenue categories going forward. That in many ways IS forward guidance and WS jumped on it like green blow flies on a cow patty.

    7
    July 28, 2021
    • Rick Povich said:
      Unfortunately this has happened for years in one form or another (which is why folks who bought in 1997, ignored the fools and hung on to their investment have done so well). I think it’s just a ratings and click-bait game these suck-an-eggy and the TV financial types play

      4
      July 28, 2021
  4. Dave Ryder said:
    Over the long term the stock price will catch up to the results.

    6
    July 28, 2021
  5. Adam Stein said:
    All the headlines are focusing on Luca’s guidance, and choosing to interpret it as bearish. For example, Marketwatch: “Apple profit nearly doubles as iPhone sales boom, but company projects growth slowdown”

    2
    July 28, 2021
    • Gregg Thurman said:
      but company projects growth slowdown”

      Slower growth isn’t the same as negative growth. And to be more accurate, Luca said growth will not be 36%, but in moderate double digits. I take that to mean a half way point between 10% and 36%, ie., ~23%.

      TWENTY-THREE PERCENT ON TOP OF $81 BILLION IS ~$98 BILLION, FROM THE WORLD’S LARGEST COMPANY

      I think we may be seeing the early stages of the paradigm shift (Tornado) I’ve spoken about many times. WS, in all its wisdom (or lack thereof) has no comprehension of how to deal with that, which makes them empty talking heads, imbued with no special powers of observation.

      6
      July 28, 2021
  6. Gregg Thurman said:
    I’ve been railing against Sacconiggly for quite some, even going so far as to ask that his face (he looks like he’s getting a booking photo taken, how appropriate) be banned from Apple 3.0

    And there he is discussing PE (calling it multiple) as though a multiple can be good or bad. Bull crap, it is what is. Suggesting that investors are selling because the multiple is to high is exactly why I use the term Investor Sentiment Multiplier.

    4
    July 28, 2021
    • Greg Lippert said:
      Agreed. What BS. Apple growth may be down from last quarter? From 36% to 25%? I’ll take that all day!

      Plus Apple pays a dividend, That’s real $$$. Google – nah!

      Noise….

      4
      July 28, 2021
  7. Don Donofrio said:
    While I don’t agree with his take and outlook, I do think his missives on CNBC should be shared here on PED3.0.

    The market has pushed Apple stock down after three extraordinarily beats. If Tony manages to somehow represent the broader viewpoint on WS that explains this, I think it has value.

    CNBC is a huge platform, and if this is on it, I want to see it. CNBC, not PED, should be the filter that should relegates him to the 3rd tier of news sources, like what you see in the Apple Stocks app links.

    5
    July 28, 2021
    • Gregg Thurman said:
      I upvoted you Don, but see no difference between censuring Saccobubbly (because his comments are damaging to the public good) than I do social media banning the Donald (which I agreed with).

      1
      July 28, 2021
      • Don Donofrio said:
        Just to be clear, I think CNBC should stop giving Toni airtime and credibility. He is worse than a broken clock.

        My point is just that if CNBC is putting him on, then I think PED should cover it because CNBC has such a huge foot print.

        And Gregg, sheesh, I have only made a few comments here and you try to loop me into a debate on the former guy? ; )

        2
        July 28, 2021
        • Robert Stack said:
          @Don: My point is just that if CNBC is putting him on, then I think PED should cover it because CNBC has such a huge foot print.

          That’s the same sentiment I have about PED’s coverage of the NYT’s & WSJ reporting on Apple. It’s often wayyy off the mark and devoid of thoughtful analysis, but because both have such large footprints it’s useful for us on this site to know.

          0
          July 28, 2021
          • Kirk DeBernardi said:
            To be best aware of anything, it’s best to be aware of all things.

            Proper analysis and deduction of SaggyBoy will then properly put him in his place that he alone has earned.

            The best analysts have their finger on the pulse of Apple, a skill Toni lacks to his (obvious by our gang’s measure) detriment.

            3
            July 28, 2021
  8. Robert LoCascio said:
    I’m late to this conversation so I’ll just add the same thing I say about this guy every time (about every 90 days) he opens his mouth on CNBC re: AAPL – “How much money have his clients NOT made by taking his advice on AAPL?”. Nuf said.

    8
    July 28, 2021
  9. Lalit Jagtap said:
    Before services Mr Toni predicted Apple was doomed because of only hardware. Now it’s other way around it’s hardware business will suffer because their is too much demand for iPad and iMac with M1.

    4
    July 28, 2021
  10. Miguel Ancira said:
    Can we PLEASE stop covering Toni?

    0
    July 28, 2021
    • Charles A. said:
      Did anyone notice they brought back ole Colin Gillis yesterday??!! He used to be so laughably negative on Apple. For years. Now he’s back — thought he had retired or had been “discharged”? — and amazingly not so negative. Maybe there’s hope for Toni…if we live long enough.

      1
      July 28, 2021
      • Aaron Belich said:
        In my short time here on PED 3.0, there will always be a Toni, a Rod, a Jun, le Pierre, etc.

        Until Apple truly mis-steps and fails to correct the ship, all of the above are just grifting little noisemakers that all manner of tech companies and their investors have to deal with over the years.

        4
        July 28, 2021
  11. David Baraff said:
    @Joseph Bland: You’re optimistic now, sure. But give it a few more years, and there will come a day when Apple will have accumulated all the money across the entire planet.

    Then what?

    1
    July 28, 2021
  12. Bart Yee said:
    When I was researching the Services revenues per quarter, it was quite apparent that the momentum and trend lines set back in 2016 were obvious – services were growing as more and more emphasis, offerings and installed base uptake occurred and that the user base became comfortable with paying subscriptions and in app purchases. We can thank Spotify, Netflix and Amazon Prime for creating that mindset in users. Charts of Services increase showed steady growth as predicted by Cook & Company in high teens to low 20’s, taking an initial predictable hit in early 2020 for the pandemic and then recovering with a vengeance, and actually accelerating.

    Now if one draws a trend line from 2018-19, that sets IMO a floor uptrend and clearly external events (pandemic, then WFH & LFH) temp dropped, then bent the trend line higher. This is IMO completely understandable and now predictable in the short term, Apple users are using services greatly and agreeable to paying for same. How long will this extraordinary service spike last is debatable depending on your point of view on the pandemic.

    On one hand, we have Luca correctly and rightly warning that this current record of 33% YOY services growth is/was a statistical outlier, and similar growth in this quarter would be brought down “mathematically” by a tougher comparison percentage wise and more back in line with “normal” double digit growth. On the other hand, delta variant is playing havoc in many areas and lengthening the time that people may still need to or return to in-home work and communication keeps the need for Apple services steady if not growing. The latter growing IMO is evident in the results and the fact that many analysts (and consensus) predicted lower to flattish revenue compared to Q2 just seemed ludicrous to me. After all, Q2 saw overall 54% Rev growth, and 65/70/78% iPhone / Mac / iPad YOY growth over a slow 2020 (not to mention Watch), but still meaning all of those new devices were in the hands current and new users – So logically, Services and App Store usage would still be growing!!

    1
    July 28, 2021
    • Bart Yee said:
      I agree with Luca and acknowledge that the services spikes are extraordinary events related to the pandemic, so no doubt should see “at some point” a reversion, not slowing, to more typical (and still solid) Services growth. Again, with the continued strong demand for new Apple devices, AppleCare, App Store, and subscription services demand will continue and with solid sales of all hardware segments in Q3, “no reason Services as a quarters’ lagging hardware sales indicator will not remain above its floor growth IMO, and certainly above most analysts’ consensus”. Indeed, consensus for Q3 services was for Q-Q contraction (!), my middle estimate just above actual, and my submitted high 1% more.

      Q2/Q1 services growth was 7.2% showing the relationship to fantastic Q1 hardware sales. Q3/Q2 growth was 3.4%. Previous 2018-2019 rates of growth were 3-6% Q-Q.

      IMO, for Sept. quarter, services revenue will remain robust and growing, probably at about 3-4% growth Q-Q, putting Services Revenue at about $18.01-18.15B. Against a tougher Q4 comp of $14.55B, gee , that’s “only” minimum 23.8% growth YOY, something any company would want as a fairly steady growth over time! But NO, for Apple analysts see it only in the short term and feel it’s a “deceleration” of growth when this is pretty much the floor of steady growth.

      Because analysts are not business owners and managers responsible for what happens with their company, they do not see the long term reasons and strategies Apple uses to create steady, sustainable, and repeatable growth over time. It’s not spectacular, sexy, or attention grabbing except when underappreciated and undervalued as by pessimistic analysts now.

      0
      July 29, 2021

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