“Once they wrapped their minds around the impact of deferred revenue on next quarter’s gross margins, analysts came away from Monday’s earnings report feeling mostly positive about Apple’s (AAPL) prospects for 2014,” Philip Elmer-DeWitt reports for Fortune.
P.E.D. reports, “A few even raised their price targets.”
Revenue Growth Trajectory Surprising to the Upside. Our CY2014 revenue and FCF estimates move higher while EPS remains unchanged due to deferral of gross profit dollars on the back of free software updates. The stronger revenue growth inflection, bullish management tone, and improving like-for-like gross margins are all bullish, in our view… Whereas two quarters ago Apple CEO, Tim Cook, set the tone by acknowledging Apple had not delivered on everyone’s expectations, yesterday’s call focused on confidence in the future including a strong holiday season. Management continues to highlight innovation both in current and new product categories, examples of which could include iWatch and iTV. – Katy Huberty, Morgan Stanley (Raises price target to $585 from $540.)
Several more reactions from analysts in the full article here.
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