Apple's Earnings Report: Analysts Grow Even More Optimistic

Two Analysts Raise Expectations for Apple Shares Ahead of Earnings Report

Deutsche Bank Analyst Raises Price Target and Reiterates Buy Rating

Deutsche Bank analyst Sidney Ho has raised his price target for Apple shares by $30 to $210, while reiterating his buy rating on the stock. Ho's new target implies a potential upside of 9.4% over Friday's closing price. In a note to clients, Ho mentioned that the multiple expansion seen by Apple in the past 3 months is consistent with other Big Tech names. He also expressed confidence in Apple's high quality of earnings and expects the company's third-quarter earnings and current-quarter guidance to meet or slightly exceed analyst expectations.

Upward Potential for iPhone, Mac, and Services Businesses

Third-party data and recent checks by Deutsche Bank indicate potential upsides for Apple's iPhone, Mac, and services businesses. Despite the global smartphone market's slower recovery, Apple's position as a premium product has provided some cushion. Ho stated that Apple may see annual growth in iPhone units for the 2023 calendar year, contrary to Wall Street's expectations of a 5% drop. Additionally, Apple could benefit from less foreign exchange headwind and favorable component pricing after building a strategic inventory in the previous quarter.

Wells Fargo Analyst Increases Price Target and Expects Revenue Report Beat

Wells Fargo analyst Aaron Rakers has raised his expected price per share for Apple to $225 from $210, indicating a potential jump of 17.2% over the next year. Rakers, who has an overweight rating on the stock, anticipates an in-line revenue report and a slight beat to expectations for earnings per share. While the firm's current-quarter expectations are below Wall Street's, Rakers believes they could be conservative. He also noted the possibility of the services business reaccelerating while expecting iPhone sales to meet expectations.

Rally Potential for Apple Shares

The increased price targets from both analysts suggest that Apple's rally may continue. With shares already rising nearly 50% this year, investors may see further gains in the future. As the company prepares to release its earnings report, market watchers will be monitoring Apple's performance closely.

Conclusion: A Promising Outlook for Apple and Potential Implications for New Businesses

The recent price target increases and positive outlook from analysts for Apple ahead of their earnings report indicate a promising future for the tech giant. The expectations of potential upside for Apple's iPhone, Mac, and services businesses, along with the anticipation of meeting or exceeding analyst expectations for earnings, provide a strong foundation for continued growth and investor confidence in Apple shares.

For new businesses, this positive sentiment surrounding Apple can have several implications. Firstly, it highlights the continued demand and potential for growth in the technology sector. Apple's ability to maintain its premium status and potentially see growth in iPhone units challenges the notion of a shrinking smartphone market. This suggests that new businesses operating in the technology space may find opportunities for success and growth, especially if they focus on delivering high-quality, premium products or services.

Secondly, the favorable component pricing and the strategic inventory built by Apple indicate the importance of supply chain management for new businesses. By carefully managing their inventory and negotiating favorable pricing, new businesses can better position themselves to withstand economic fluctuations and potentially improve their margins.

Finally, the potential rally in Apple shares and the overall positive sentiment toward the company showcase the influence of market dynamics. As a new business, understanding and monitoring market trends and investor sentiment can help in making informed decisions and adapting strategies accordingly.

In conclusion, the positive outlook for Apple shares and the implications it carries for new businesses in the technology sector highlight the importance of delivering premium products or services, managing supply chains effectively, and staying attuned to market dynamics. By incorporating these insights into their strategies, new businesses can position themselves for growth and success in a competitive landscape.

Article First Published at: https://www.cnbc.com/2023/07/24/analysts-are-getting-even-more-bullish-on-apple-into-its-earnings-report.html