Katy Huberty has raised her Apple 2022 estimates

But with investors focused on December quarter iPhone sales, she doesn't expect September's earnings -- even if they beat -- to move the stock.

From a note to Morgan Stanley clients that landed on my desktop Friday:

Estimates likely to move higher post-earnings, but we don't view earnings as a material stock catalyst. Our quarterly checks indicate Apple is likely to outperform September quarter Street estimates by a healthy margin (MS F4Q revenue is 4% above consensus estimates) on the back of stronger than expected iPhone shipments and continued Services outperformance.

But investors will be more focused on the December quarter outlook given September results only include a small portion of iPhone 13 shipments. And while we are constructive on the December quarter outlook despite recent negative supply chain headlines, we don't expect Apple to provide a formal revenue guidance range and instead speak to segment-level growth trends as they have done for the last 6 quarters.

At the same time, there remain a number of important questions outstanding related to potential App Store model changes post the Apple v. Epic decision and sustainability of iPhone growth as Y/Y compares become more difficult in FY22.

Therefore, with shares trading just 5% below Apple's trailing 52-week high, we believe investors are more likely to wait for clarity on these topics before potentially re-engaging. So, while we remain bullish on Apple's FY22 outlook and expect estimates to move higher post F4Q21 earnings, we just don't see earnings alone as a material stock catalyst.

Maintains Overweight rating and $168 price target.

My take: Two Huberty notes in the space of three days. Earnings must be just around the corner.

Cue Exhibit 2:


  1. Gregg Thurman said:
    we just don’t see earnings alone as a material stock catalyst.

    This comment may freeze investment at <$150 through next week. If that happens I may get the opportunity to sell Weekly Calls against my NOV $140s 3 more times before i sell them or they get Called away. That would be a very good thing, although I’d prefer they got Called away no later than OCT 29. That would allow me to reset my NOV Calls to DEC Calls and begin selling Weekly Calls against those.

    October 22, 2021
    • Jonny T said:
      I certainly respect that you know what you are doing Gregg, but I have to say that your post is double Dutch to me…!!

      October 22, 2021
  2. Robert Paul Leitao said:
    Buy for the long-term and stay with it for the gains. Apple is undervalued. The market is looking for direction from Apple’s management and has been fairly cautious without more explicit guidance. Apple is moving higher over time and the greater risk is being out of the stock versus a bit of patience and being onboard for the ride. Whatever shares investors aren’t buying now, Apple is repurchasing for the benefit of long-term shareholders. Patience will have its reward.

    October 22, 2021
  3. Jerry Doyle said:
    During a period when Apple is firing on all cylinders and is bringing home the bacon to shareholders we continue to see WS “Yawn.” Apple is undervalued as Robert Paul denotes discerningly. While this fact discombobulates me and many others, Apple ignores such distractions (if she even cares) and plods ahead methodically with head bowed doing her needlework creating industry setting standards for delivering premium products and services. Quarter after quarter of blow-out performance numbers and the markets Yawn. And so we continue to tread, according to Ms. Katy, flirting around ATHs until we get more clarity with December quarter results. Yet, if Apple continues not to provide forward guidance subsequent with December results, what then? We will have no more clarity in January 2022 on the Covid virus variants as we have clarity now. Apple most likely will not provide forward guidance next January. So, what do we do? Play this perpetual game of blowing off the barn doors with outstanding quarterly performances and not be rewarded in the short term.

    As Robert Paul denotes, this is a propitious period for Long Term Apple Investors to load up on as many shares of Apple as possible, which is exactly what Apple is doing with buying back its shares and retiring them. We have seen this picture show before and it rewarded Long Term Apple investors handsomely.

    October 22, 2021
    • Robert Paul Leitao said:
      Jerry: I’m liking the price target and time horizon offered by Dan Ives. $3 trillion market cap in 9 to 12 months. His price target is $185. That’s about a 25% advance in the share price from the current range and it’s not a long time from now. In the meantime, Apple can invest tens of billions of dollars repurchasing shares on the cheap. In the end, it works out for just about everyone.

      October 22, 2021
  4. Daniel Epstein said:
    Well I agree that 4th Quarter earnings probably won’t be a great catalyst for the stock without impressive Q1 projections from Apple. They do seem to be delivering product upgrades to have a great quarter if they are actually getting enough supply. How much confidence they have in numbers going forward May shake the bears pessimism away. In this case under promise and over deliver might be a difficult job. I do find it hard to believe that other people have a better understanding of Apple sales than Apple itself. The professional analysts even the ones we like have usually missed the earnings and revenue numbers by a wide margin. Now if Apple does give revenue guidance that should be taken seriously as the pandemic seems to be transitioning from chaotic headwinds to more predictable ones. And if the guidance beats expectations then hold onto your hats.

    October 22, 2021
  5. Robert Paul Leitao said:
    I like Katy’s work and have an “overweight” rating on her narrative.

    October 22, 2021

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