Premarket: Apple is red

apple premarket red 10-29-21From MarketWatch’s “It’s transitory. Analysts shake off Apple’s earnings disappointment and stay focused on 2022 demand” posted early Friday:

Investors were pushing the sell button on Apple Inc. shares early Friday, following disappointing results, but many Wall Street analysts held their bullish ground, saying demand for the tech giant’s products is not going anywhere.

Shares of Apple AAPL, +2.50% fell over 3% in premarket trading after the iPhone maker reported its first miss on revenue since the holiday quarter of 2018, as Chief Executive Tim Cook said silicon shortages and COVID-related manufacturing problems led to a $6 billion negative hit.

But Cook also said demand for the company’s products were “robust,” which was providing a source of comfort for Wall Street analysts in the aftermath of surprisingly weak results.

A team of UBS analysts led by David Vogt said that they see December as a bottom for the company’s woes. Their checks indicate Apple’s supply chain and COVID headwinds in South East Asia impacted units by around 5 million in the quarter, but believe demand as “likely persistent given backlogs.

“As such our FY 2022 230 million unit [estimate] is unchanged despite the [near-term] disruption. Moreover, we believe our forecast could prove conservative if the 5M lost units are captured in FY22,” said Vogt and the team, who maintain a buy rating and 12-month price target of $175.

Among the positives: services revenue that came at $18.3 billion, some 7% above their estimates and paid subscriptions that grew to over 745 million customers, while Macs and iPads delivered “solid upside to estimates,” said the UBS team.

Patterns: Neutral (commodity channel index). Max pain still at $147.

apple premarket red 10-29-21

One Comment

  1. Rodney Avilla said:
    yea, it’s down. But once the right side of the brain settles down, and the left side contemplates –

    Revenue up 28.8% YoY.
    Diluted EPS up 69.9% YoY.
    iPhone Revenue up 47% YoY.
    Services Revenue up 25.6% YoY.
    Wearables and Other Revenue up 11.5% YoY.

    Remember when last years numbers came in, they were so good that we were warned that this year would have a tough compare, but looks at iPhone revenue up 47% and EPS up 69%.

    October 29, 2021

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