Excerpts from the notes I've seen. More as they come in, new ones on top.
Melissa Fairbanks, Raymond James: Better than feared. We reiterate our Outperform rating on Apple and adjust our price target to $185 following June quarter results. Despite a number of headwinds including FX, China shutdowns, macroeconomic concerns, and component shortages, AAPL was able to deliver record June quarter revenue, and while specific September quarter guidance wasn’t provided, directionally the outlook appears better than consumer trends would suggest. Similar to commentary from QCOM on Wednesday, the premium tier of consumer devices is proving to be fairly resilient – and is certainly faring better than low/mid-tier markets. That said, while AAPL has not yet seen evidence of a macro impact on iPhone sales, management did not provide specific revenue guidance – as is typical in times of uncertainty. Outperform. Cuts target $5 to $185.
Erik Woodring, Morgan Stanley: Resilience Amid a Tough Macro Backdrop. June quarter results were better than we expected despite greater FX headwinds (partially negated by supply chain headwinds below mgmt's $4-8B guide) as a record June iPhone quarter more than offset underperformance in Mac and Wearables. Revenue growth will accelerate in the September quarter - we forecast 5% Y/Y growth vs. 2% Y/Y in the June quarter - a product of 1) solid iPhone demand and early iPhone 14 sell-in, and 2) easing supply chain pressures that will help Apple catch-up to unfulfilled iPad and Mac demand... Apple is not fully immune to broader macro challenges, and we are seeing a slowdown in spending impacting sales of more discretionary products such as Wearables, and Services such as digital advertising. Nevertheless, Apple's sticky customer base, continued product/services innovation, and more staples-like offerings keep Apple more insulated from these challenges than peers, limiting downside earnings risk. Overweight. $180.
Wamsi Mohan, BoA Securities: Something for the bulls and the bears. The bulls will focus on (1) beat in the qtr. on revs and gross margins, (2) supply remains constrained for Mac and iPad, (3) mix of iPhones remains very strong and channel inventory low, (4) delivering results despite a very challenging FX environment, and (5) installed base continues to grow with strong switching activity. The bears will focus on (1) gross margins are heading back lower (for FX and Mix reasons), (2) services growth is decelerating (both on constant currency and more so on reported) to potentially sub 10% in Sep qtr., (3) services margins are at a near-term peak as advertising (high margin) is slowing down, (4) weakness at the low end of portfolio of wearables (from an ASP perspective) could creep higher into other product areas, and (5) implied guidance was short of consensus and drives the start of a negative estimate revision cycle. We reiterate buy as we see many of the issues as cyclical not structural. Buy. $185.
Angelo Zino, CFRA: Our risk assessment reflects our view of Apple’s ability to shift towards higher-margin and more recurring Services offerings, which reduce the future earnings volatility of the company. In addition, we have a favorable view of the company’s scale, enormous cash position, and free cash flow potential. Despite a seemingly ever-evolving market for consumer-oriented technology products and the company’s need to rely on the success of product innovations, we forecast Apple’s ecosystem will continue to sustain retention rates higher than 90%. Buy. $175.
Abhinav Davuluri, Morningstar: Apple Deftly Navigates Challenging Supply Environment in Fiscal Q3 but Headwinds Loom. Narrow-moat Apple reported healthy fiscal third-quarter results that came in line with our estimates. We are maintaining our $130 fair value estimate and still view shares as overvalued. While we remain positive on Apple's ability to extract sales from its installed base via new products and services, we believe demand for Apple’s products is likely to slow in the next few quarters, following several stellar quarters of growth. Fair value $130.
Daniel Ives, Wedbush: Cook Delivers In "Top Gun Maverick Fashion" a Strong Quarter; China Holding Up. Last night Apple delivered a robust June quarter that will be the focus of the tech universe as the barometer for Cupertino is a major positive for the Street digesting this results. Apple delivered total revenues of $82.96 billion vs. the Street at $82.79 billion with iPhone revenue of $40.67 billion the star of the show and beating the Street's estimate of $38.59 billion despite fears of a clear miss with Covid shutdowns in China and macro swirls. Services of $19.60 billion came in just below the Street's estimate of $19.75 billion and better than whisper numbers. EPS of $1.20 beat the Street of $1.16 with margins all ahead of the Street. Outperform. $200.
Kyle McNealy, Jefferies: Decent Quarter Considering Headwinds + Samsung/Huawei Switchers… Reiterate Buy. Apple announced Jun Q results ahead of consensus but guided down for the Jun Q on incremental FX headwinds. Adjusting for headwinds in the Jun. Q and Sep. guide, we estimate core business constant currency growth to be 8% and 10%, respectively. We like the accelerating switching activity and think there’s further opportunity with 5G adoption, particularly as headwinds abate. Buy. $200.
Gene Munster, Loup Ventures: iPhone is Stronger Than an Acre of Garlic. Apple is, once again, defying gravity and powering through the early stages of the macro downturn. This is based on what I believe, was the most important comment from the call: Cook's assessment that, in respect to the iPhone, "there was no obvious evidence of macroeconomic impact during the June quarter besides FX." The segment grew 3% year over year, which is more impressive than it sounds given it was up against a monster 50% comp last year. The iPhone is stronger than an acre of garlic.
Harsh Kumar, Piper Sandler: Apple Executes Once Again. During the June quarter, Apple reported results slightly better on both the top and bottom lines. Apple appears to be seeing no meaningful impact on its iPhone business in the current macro environment. In addition, supply opened up in a meaningful way in China at the end of the June quarter, which allowed some pent-up demand to be met. Most products and services set records in the quarter despite the modest supply issues and macro uncertainty. Moving forward, FX appears to be the biggest headwind for Apple, accounting for ~600 bps of growth headwinds. The FX, along with the lower revenue, is putting pressure on the margin structure, but we view this as temporary. Apple’s strength lies in its brand loyalty as well as its tremendous install base, both of which are helping offset the macro. Overweight. $195.
Kyle McNealy, Jefferies: Better than Expected Supply Chain Performance. The company is still not issuing detailed guidance. From their goal-post style guide, we estimate they’re looking for $86-89bn in Q4 sales and $1.17-$1.31 in EPS versus consensus for $90.0 and $1.32 respectively. FX impact is expected to be as 6% headwind versus the 3% in Q3. The incremental FX impact more than accounts for the below consensus guide.
Amit Daryanani, Evercore: Building a Wider Moat Through Macro Worries. We would stress that AAPL revenue appear more driven by supply constraints vs. macro worries – though they did note pockets of softness due to macro (digital advertising, wearables, etc)... We think AAPL remains uniquely positioned to sustain mid/high single digit sales and low/mid teens EPS growth in FY23 and potentially beyond. Outperform. Raises target $5 to $185.
Daniel Ives, Wedbush: A "Top Gun Moment" as Cook Navigates Apple to Strong Results Despite Fears. The all-important China region posted revenues of $14.60 billion coming in just below their year-ago performance of $14.76 billion which we view as a Top Gun Maverick type feat for Cook & Co. given the ongoing COVID shutdown and speaks to the overall demand story seen with Apple...We walk away from the conference call and June results incrementally more positive that Apple can navigate this economic storm with the demand and growth story well intact for iPhones and Services front and center. Outperform. $200.