Jefferies — 'We believe AAPL intends to tell a compelling Services story'
Price target: $265
Rating: Buy
"AAPL will stop disclosing unit sales figures next qtr, fueling fears the company has something to hide," the Jefferies analyst Timothy O'Shea said in a note.
"But AAPL will disclose Services gross margin for the first time ever, a potential catalyst for the stock. We believe AAPL intends to tell a compelling Services story, which we believe has 2x higher gross margin than hardware and improving."
RBC Capital Markets — 'The bull thesis is more diluted'
Price target: $240 (from $250)
Rating: Outperform
"AAPL reported modest upside to Sept-qtr results with no notable slowdown from China as better iPhone ASP's and stable GM's enabled revenue and EPS upside vs. expectations," RBC's Amit Daryanani said.
"The disappointment from this print will be A) their decision to stop providing iPhone units/ASP information going forward and B) Dec-qtr gross-margin guide was underwhelming vs. expectations given memory tailwinds."
Daryanani added: "We are sticking with our OP rating, but concede the bull thesis is more diluted given risk that AAPL's desire to stop providing iPhone unit disclosures is an attempt to hide unit declines going forward (will take a while to prove/disprove this)."
Wedbush — A 'Houdini-like metrics move'
Price target: $310
Rating: Outperform
"Last night Apple delivered FY4Q (Sept.) results which beat the Street from a headline number but slightly missed iPhone unit shipments which was the focus of investors," the Wedbush analyst Daniel Ives wrote.
"However the quarter itself took a back seat to the modestly softer December guidance that Cook & Co. gave on the heels of its much anticipated XS/XR iPhone product cycle which remains the linchpin of the Apple story for FY19. That said, the 'jaw dropper' last night was when Apple announced it will stop providing units/ASPs for iPhones, Macs and its other product lines. The Street will find this a tough pill to swallow this morning as the transparency of the Cupertino story takes a major dent given that tracking iPhone units has become habitual to any investor that has closely followed the Apple story for the last decade+ and is critical to the thesis."
He added: "While last night's 'Houdini-like metrics move' was a stunner, our core bullish thesis on Apple remains unchanged despite the noise this morning. We maintain our OUTPERFORM rating and $310 price target."
Goldman Sachs — 'Apple is seeing better price elasticity at higher price points'
Price target: $222
Rating: Neutral
"The midpoint of FQ1'19 (Dec'18 QTR) revenue guidance at $91bn (range: $89bn-$93bn) missed our estimate by 4.3% and FactSet consensus by 2.1%, gross margin at 38.3% (range: 38.0%-38.5%) came in 0.1pp below our estimate and 0.3pp below consensus," the Goldman Sachs analyst Rod Hall said in a note.
"The implied FQ1'19 EPS at $4.54 (range: $4.36-$4.72) missed our estimate by 10.1% and cons by 7.7%. We believe consumer weakness in markets such as Turkey, Russia, India, Brazil and possibly China is driving the weaker guidance. Turkey, Russia, India and Brazil alone contributed 6% of total iPhone units in FQ1'18."
He added: "We believe Apple is seeing better price elasticity at higher price points as its sticky base of users are willing to pay up for more features. Should Apple find even more expensive features to add to its devices that it believes add value for users we think they would not hesitate to increase high end device prices further."
