Shares of Apple rose “after Goldman Sachs’s Simona Jankowski reiterated a Buy rating on the stock, and a $170 price target, noffing that Apple’s earnings report on August 2nd contains the prospect for ‘volatility,’ but that investors should ‘stay long’ the stock given the next iPhone can ultimately pay off next year in higher profit,” Tiernan Ray reports for Barron’s.
“The issue with the August report is not the results of the June quarter but rather what Apple may offer for its outlook for the September quarter’s revenue, writes Jankowski,” Ray reports. “She sees three possible ranges for forecast revenue, indicating three possible scenarios.”
“One possible range for the September quarter, writes Jankowski, is for $51 billion to $53 billion, above the $50.5 billion consensus, which Jankowski believes would imply the iPhone is ‘launched’ on September 22nd,” Ray reports. “Another possible scenario is that it doesn’t launch until September 29th, which would lead to a revenue outlook of $48 billion to $50 billion. That’s the most likely scenario, she thinks. But if revenue is forecast below $48 billion, it could imply the iPhone comes out in October instead.”
“But reasons to stay the course include the larger installed base of iPhone users versus prior ‘super cycles’ for the device, writes Jankowski,” Ray reports. “She estimates the installed base of iPhone users is now at 700 million, more than twice the 300 million total in 2014 when Apple put the iPhone 6 on sale.”
Read more in the full article here.
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