Citing App Store growth estimates for June that suggest strong Services over-performance, Morgan Stanley has increased confidence that Apple will report a significant June quarter earnings beat.
Mike Peterson for AppleInsider:
In a note to investors seen by AppleInsider, lead analyst Katy Huberty estimates that the App Store will grow 18% between June 1 and June 22, suggesting nearly five points of outperformance compared to her earlier forecast…
“When we dig into the underlying data from June-to-date, we come away incrementally bullish on the prospects for accelerating App Store growth in the rest of the year,” Huberty writes.
The App Store growth is accelerating in eight of the 10 largest markets from May. There also appears to be a material acceleration in many markets that were hit by the coronavirus pandemic earlier, including China, Taiwan, Japan, and South Korea.
Huberty suggests that this could hint at growth acceleration in Western markets further into 2021.
MacDailyNews Take: Apple’s FY 21 third quarter results are due at the end of July (exact date TBA) and, currently, analysts’ consensus calls for EPS of $0.99 (vs. $0.64 YOY) on revenue of $72.78 billion (vs. $59.69 billion YOY, Apple’s Q3 record). Even with these weird “COVID-compare” expectations, Morgan Stanley is likely on solid ground expecting Apple to report better-than-expected June quarter results.