Analyst: Apple merely matching earnings expectations could push stock higher

“Pacific Crest’s Andy Hargreaves expects that results should at least be in line with expectations, and with investors sentiment so low, this should be enough to send the stock higher,” Teresa Rivas reports for Barron’s.

“He reiterated a Buy rating on the stock Monday,” Rivas reports, “although he lowered his price target by $2 to $121 to reflect his slightly lower EPS estimates.”

We are slightly reducing our iPhone and Mac unit estimates to account for a potential slowdown in European consumer spending. This drives our F2016 EPS estimate to $8.37 from $8.44 and drives our F2017 EPS estimate to $9.03 from $9.31. — Pacific Crest analyst Andy Hargreaves

Read more in the full article here.

MacDailyNews Note: Apple reports Q316 earnings results after market close on July 26th.

On April 26th, Apple provided the following guidance for its fiscal 2016 third quarter:
• revenue between $41 billion and $43 billion
• gross margin between 37.5 percent and 38 percent
• operating expenses between $6 billion and $6.1 billion
• other income/(expense) of $300 million
• tax rate of 25.5 percent

Analysts consensus currently calls for $1.39 EPS and revenue of $42.03 billion.

3 Comments

  1. There have been plenty of times when Apple has comfortably beaten it’s own guidance, but the analysts have raised expectations of a much more impressive result, which Apple could not quite match, therefore they declared that Apple failed and the stock went down accordingly.

    I’ll just wait until Apple produces the actual figures on the 26th and will not be getting concerned with the guesses of analysts.

  2. I wouldn’t count on anything with Apple. Apple may go to $100 a share but it will immediately drop back below $95 as big investors sell off so they can buy more of Amazon and Tesla. That just how it is for the smart investors. All Elon Musk has to do is tweet about a “master plan” for Tesla and the stock will simply soar. That’s the type of investment to have if you want to make some quick returns. Apple could turn in very solid earnings and the stock is just as likely to collapse thanks to Tim Cook’s loser skills. I’m not going to complain. If the stock drops then its easier for Apple to buy back more shares. For me, the dividends can be counted on. Apple’s stock price bends like reeds in a gale force wind.

    I don’t pay any heed to what the analysts forecast. They’re either lying or guessing. I know the big investors won’t touch Apple because it’s just a waste of time for them to own. If Apple reaches $105 by the end of the year, I’d be extremely surprised. By then Amazon will be past $800 and still showing no signs of slowing down. Tesla will certainly be much higher than it is now. Apple will remain the only big tech loser because there’s no way they can beat expectations that are set with the purpose of being missed.

    All I ever see is bad news for Apple and I’d hardly think that would attract any Apple investors. If anything, it should discourage shareholders from even keeping their Apple stock. It’s so funny as how the financial experts claimed how badly Apple would be hurt by Brexit, but if you notice the stock market is higher now than it was before the UK left the EU. To me, Brexit was only a way to promote volatility in the market in order to manipulate various stock prices. What exactly changed in the market over the last two weeks? Nada. It’s as if Brexit never happened.

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