In 2020, there was huge investor buzz about the debut of the iPhone 12 family, the company’s first 5G-capable models. Demand has been strong with iPhone revenues in the March quarter up 65.5% to $47.9 billion. But there’s significantly less buzz about this year’s update, which is viewed by some investors an interim step — what Morgan Stanley analyst Katy Huberty describes as an “s-cycle.”
“Investors are concerned about Apple’s fiscal 2022 growth prospects, given the expectation for an iPhone s-cycle and waning cyclical work from home tailwinds,” she writes in a research note Thursday. “We’re not as concerned and see a good long-term buying opportunity.”
Huberty expects that June-quarter results will be better than the Street fears, driven by strong iPhone, Mac, and iPad demand, and that the uptick that started during the pandemic will be durable. But she concedes that fears that revenue could be down double digits in fiscal 2022 won’t be disproved in the June quarter. Huberty still thinks Apple can generate revenue growth in the low teens through fiscal 2023, with EPS growth in the high teens.
MacDailyNews Take: Huberty reiterated her Overweight rating and inched up her Apple price target to $162 from $161.