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.