Investors split about whether Apple can maintain growth, survey suggests

A small questionnaire sent out to a handful of Apple investors suggests that there isn't a consensus on whether the Cupertino tech giant can maintain its growth across 2022, according to JP Morgan.

In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee analyzed responses from a buy-side survey conducted after Apple's first quarter results. The survey only had 15 response, but Chatterjee says the data could "help where the Bull and Bear case for Apple lies in relation to FY22 performance."

The bull case, for example, would see Apple maintain double-digit revenue growth in 2022, led by execution-led upside to implied guidance for the upcoming March quarter. A bull case expects 10% to 15% revenue growth year-over-year in 2022.

In the survey, the majority of the 15 respondents believe that iPhone revenue growth is unlikely to be maintained at the rate that Apple saw in Q2. JP Morgan, however, believes that a stronger than expected mix, as well as better demand for iPhone 13 and iPhone SE models, drive upside to its current estimates for growth.

Despite the fact that investors believe iPhone growth will decelerate in the coming quarters, Chatterjee notes that Apple handset demand has consistently outperformed investor expectations. That supports expectations for iPhone volume upside.

On Services growth, expectations are higher. The majority of respondents in JP Morgan's small survey say they believe Apple will see growth in the 15% to 20% year-over-year range.

Most of the respondents are also "comfortable" with a 20x to 25x multiple range, suggesting Apple has achieved structural re-rating from a few years prior. Apple shares are currently trading at 26x earnings, implying a bull case of a multiple above 25x.

"The survey results indicate that the sentiment on Apple shares and the likelihood of outperformance this year relative to other Big Tech stocks remains balanced, with about only half of the respondents expecting Apple shares to outperform other Big Tech stocks," Chatterjee writes.

The analyst maintains his 12-month Apple price target of $210, based on a price-to-earnings multiple of 30x on his 2023 earnings estimate of $7.02.

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8 Comments

kingofsomewherehot 4138 comments · 22 Years

About 2 years ago

If your business plan REQUIRES continuous GROWTH, then it's not a viable business plan long-term.... it's more like a Ponzi scheme.

(A[[;e is not a start-up... of course a start-up would require growth in the beginning.)

shareef777 136 comments · 16 Years

kingofsomewherehot said:

If your business plan REQUIRES continuous GROWTH, then it's not a viable business plan long-term.... it's more like a Ponzi scheme.

(A[[;e is not a start-up... of course a start-up would require growth in the beginning.)

This isn't Apple's business plan. It's the investors that think EVERY business needs to continuously grow. Apple has built up an ecosystem to the point where they can be mediocre for a decade+ and people would still buy their products just because of how well they work together. But investors don't care about how well built the product is, they just want more $$$ then what they had last quarter.

aderutter 622 comments · 17 Years

Apple’ business plan does not require continuous growth.

Apple make much more PROFIT every quarter than they can use - so they distribute it back to shareholders via buy-backs.

Personally I will be more than happy if AAPL share price averages exactly the same as a Nasdaq tracker. Even just keeping up with inflation would be fine for me. However, analysts slways under-estimate AAPL.

Personally I foresee a lot of Mac growth over the coming years.

paxman 4729 comments · 17 Years

If, or when an Apple car arrives, in whichever form, it will likely shake things up in a big way. I can't predict wether it will fuel growth or end up as a failed and very costly experiment, but my money is on the former.