Excepts from the notes I’ve seen. More as they come in, new ones on top.
Chris Caso, Raymond James: Believe! For March, management guided to “solid, but decelerating” y/y growth, against strong comps in the year ago quarter due to last year’s late iPhone launch. We interpret that guidance to suggest 5-6% y/y growth, also above our estimates and well above consensus, as some easing in supply constraints allow Apple to catch up on unfulfilled demand. Looking ahead, we think constraints over the last two years have likely tended to extend the 5G upgrade cycle, and means that iPhone can still manage to grow next year. We think the growing installed base will continue to pay dividends for services growth. And we look forward to the next “one more thing” – VR – though we’re not yet confident in that product’s arrival in C22. Outperform. Target to $190 from $185.
Katy Huberty, Morgan Stanley: Ecosystem Strength Shines Bright. Apple’s December quarter was one of the cleanest quarters in recent memory as revenue, gross margin, and EPS all beat our above consensus forecast, with Mac and Services growth particularly strong. When coupled with a stronger than anticipated March quarter guide despite difficult Y/Y comps and continued (but easing) supply constraints, tonight’s results illustrate the strength and stability of Apple’s product and services ecosystem, a clear differentiator in a more difficult market environment. In our view, Apple’s results are likely to refocus investors on the longevity and durability of Apple’s 1.1B, and growing, user base. Overweight. Target to $210 from $200.
Abhinav Davuluri, Morningstar. Narrow-moat Apple reported stellar fiscal first-quarter results that came in substantially ahead of our estimates despite supply chain constraints and the ongoing chip shortage. Demand for the firm’s latest iPhone 13 and MacBook Pro drove record iPhone and Mac revenue for the December quarter. We remain positive about Apple’s ability to extract sales from its installed base via new products and services. While we are raising our fair value estimate to $130 per share from $124 to account for the stronger results, we think the recent stretch of double-digit revenue growth will be difficult to maintain as COVID-19-related Mac and iPad demand subsides.
Martin Yang, Oppenheimer: Share Gain Does Not Stop Here. Once again, Apple delivered stronger-than-expected Dec. Q results and Mar. Q guidance despite supply chain shortage. It set an all-time total revenue record of $123.9B (+11% Y/Y) and installed base record of 1.8B. The strength was broad- based across product categories and geographies. Our previous view was that Apple may accelerate share gain in the current environment due to its better supply chain management and improving performance/price ratio relative to competing hardware products. Notably, Apple is still gaining new customers at impressive pace, with 6 out of 10 MacBook buyers in China, 1/2 iPad, and 2/3 Watch buyers new to devices. Those new users will likely purchase more devices in the Apple ecosystem and contribute sustainable growth to Apple’s active installed base. Outperform. Target to $190 from $170.
Daniel Ives, Wedbush: Back Against the Wall, Cupertino Comes Out with a Rocky Balboa-Like Performance. With ASPs continuing to be very positive on Pro/Pro Max and as of today roughly 250 million of 975 million iPhones worldwide not upgrading in 3.5 years, we focus on the demand front and do not view the supply chain issues as crashing the iPhone growth story in 2022 despite many yelling fire in a crowded theater in this white knuckle market. Overall, the Apple growth story is plowing straight ahead and supply chain improvements potentially on the horizon is a major bullish data point not just for Apple, but the entire tech sector to digest this morning. Outperform. $200.
Wamsi Mohan, BofA Securities: Delivers another record quarter, demand strong across the board, PO to $215. The resilience of Apple’s financials and consistent ability to deliver strong cash flow make its investment appeal even higher in a macro environment where predictability of cash flows is becoming increasingly scarce… We do not expect Apple to achieve supply/demand balance on iPhone/iPad exiting the Mar qtr as demand remains strong and component shortages continue. Apple is benefiting from better mix as 1) customers buying higher-end products helped by financing/trade-in programs, and 2) supply constraints having a higher impact on older (lower priced) models. Buy. Target to $215 from $210.
Gene Munster, Loup Ventures: We Shouldn’t Be Surprised by Apple’s Results. I’ve seen a lot of Apple quarters. So many that the countless impressive ones blur together. I’m trying to guard against recency bias but I still believe this one was memorable. Not just because the December quarter and March outlook were impressive on all metrics — Apple’s done that before. This time was different given it was in the face of chip shortages, COVID, ships parked outside of ports, spikes in logistic costs, store closings and hard comps. When I searched for an explanation of how they did it, I realized I shouldn’t be surprised by the performance. When you build the best consumer tech in the world, things turn out that way.
Amit Daryanani, Evercore: Just the right amount of everything. We think “March” is the difficult quarter and if AAPL can show top-line growth despite a difficult compare (+56% LY) it actually sets the bar for revenue acceleration in H2:22 driven by easing compares + multitude of new product launches that should occur. Net/Net: While we suspect some debate around how much of Mar-qtr is driven by channel dynamics, we think revenue compares get easier in June and beyond. At the same time we should see various new launches – iPhone SE3 (later May), iPad/mac refresh (June), iPhone 14 (September), and new offerings like AR/VR (Fall 2022). Outperform. $210.
Harsh Kumar, Piper Sandler: Apple Doesn’t Disappoint – Record Metrics Across the Board. Apple reported a strong December quarter, with record results across most categories. The company was able to deliver the strong results and March quarter guidance despite the global supply constraints. Going forward, we expect momentum to continue on a Y/Y basis, with Apple expected to set a record March quarter due to 1) strong 5G iPhone penetration and 2) supply shortages improving compared to the December quarter. The company currently has a stunning 1.8B devices installed globally, which is helping the services business reach new heights and driving profitability higher. Apple’s paid subscriber count is now 785 million, up 165 million from last year. We believe 5G smartphone penetration will continue to drive the install base higher over the next couple years. Overweight. $200.
Kyle McNealy, Jefferies: China Making a Big Comeback China revenue was strong at $25.8bn (+21% Y/Y). Strong results also came in for all geographies except Japan which was weaker. We’ve been hearing in our discussions with industry contacts that Apple is now the leading smartphone vendor in China. It’s not natural for Apple to be the biggest share gainer from Huawei as it takes an operating system switch from Android to iOS. However, we think other OEMs in China (Vivo, Oppo, Xiaomi, and Honor) have such little experience and success selling premium phones it leaves a door open for Apple. Buy. $175.
Daniel Ives, Wedbush: Monster iPhone Number Despite Chip Shortage. Apple just delivered a robust December quarter that will be the focus of the tech universe as the Street had major supply chain/growth fears heading into this print… While the conference call will be key and high level demand commentary for the March quarter, Cook is calling out some supply chain improvement for the March quarter which are “calming words heard around the tech world” and much needed good news in what has been a market storm. Outperform. $200.
Rod Hall, Goldman Sachs. Neutral. Target to $161 from $142.
Pierre Ferragu, New Street. Upgraded to Neutral from Sell. Target to $165 from $90.
David Vogt, UBS: Buy. Target to $185 from $175.
Tim Long, Barclays: Equal weight. Target to $169 from $145.
Brian White, Monness. Buy. Target to $199 from $184.
Tom Forte, Davidson. Buy. Target to $185 from $170.
Michael Walkley, Cannacord: Buy. Target to $200 from $185.
Laura Martin. Needham: Buy. $170.
Krish Sankar, Cowen: Outperform. Target to $200 from $180.
William Power, Baird: Outperform. Target to $190 from $185.
Sidney Ho, Deutsche Bank: Buy. Target to $220 from $200.