Apple reported a record September quarter with $90.15 billion in revenue, and analysts are optimistic that the company will remain strong in the December quarter.
Apple Park
After Apple's earnings report and conference call, analysts have shared their reactions to the company's numbers and remarks. While Apple didn't provide specific guidance about the fiscal Q1 of 2023, analysts expect the company will fair better than other large tech companies.
A note from J.P. Morgan suggested that the results were within expectations, but the product mix was different than expected. The iPhone continues to be constrained by the supply chain, and the Mac and wearables benefited by pent-up demand.
Apple managed to expand revenue by double-digit percentages despite tough macro conditions. Apple is expected to continue to be resilient, and J.P. Morgan has set a $200 price target.
Apple's ecosystem is sustaining the company
"We believe tonight's results demonstrate the durability of Apple's product and services ecosystem," reported Morgan Stanley analysts, " as Apple beat consensus EPS by 2c and guided to a December quarter EPS in-line with the Street despite near record FX headwinds and concerns about the health of the consumer. "
"And while there remain a number of micro and macro factors that Apple needs to contend with over the next few months to deliver on what we thought was solid December quarter guidance," it continued, "we're hard pressed to find a company in our coverage that is operating at the level of consistency that Apple is."
Cowen and Company reported similarly, with Apple slightly beating consensus in iPhone sales and year-over-year growth. Chip supply constraints are lessening compared to the previous September quarter, and Apple also noted iPhone 14 Pro and iPhone 14 Pro Max demand remains under-supplied.
Services revenue growth appears to be flattening due to macro conditions. However, Cowen models services growth at approximately 10% year-over-year in Q1 2023 thanks to Apple Music and Apple TV+ price increases.
Cowen sets their price target at $200 with AAPL a defensive name on strong shareholder returns.
Impressive
Piper Sandler calls Apple's September quarter results impressive, given the macro sentiment and FX headwinds. Supply constraints surrounding Apple Watch and iPhone will continue into the 2023 fiscal year, which will continue to place supply behind demand.
Apple remains an overweight rating. Piper Sandler estimates an EPS of $6.15 on revenues of $407 billion in fiscal year 2023.
Gene Munster says Apple is the standout mega-cap with its shares trading flat after the September results, versus competitor's being down an average 12%. Investors are buying both performance and potential in Apple.
Reports of softened macro from Microsoft, Google, Meta, and Amazon stand out against Apple's 8% revenue growth and being the only company to effectively guide December revenue inline with expectations. Consumers' need for Apple products drives Apple's strong performance.
Munster suggests that there is a lack of conversation around Apple's growth potential. He says Apple has growth optionality in health, augmented reality, and auto. One of those three will set Apple up for another decade of solid performance.
Wedbush calls Apple a tech standout in a dark economic and FX storm. Apple was the one bright spot as iPhone demand was relatively strong despite the macro with a heavy iPhone 14 Pro mix.
The note refers to Apple as a "Rock of Gibraltar name in large-cap tech with Cook flying Cupertino through this economic storm." Wedbush maintains an outperform rating with the price target lowering from $220 to $200 to reflect a lower multiple.