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Apple’s rocket shares, which record as “incredibly strong” gains, allay iPhone pandemic fears

Since Apple Inc. Focusing on the expected launch of its first 5G phone later this year, the company simply gave a confident signal that its hardware is still in high demand during a global pandemic.

Apple shares AAPL,
+ 10.46%
driven to another record Friday, with shares crossing the $ 400 mark for the first time and eventually gaining 10.5% as analysts cheered on the company’s results for incredibly strong profits. The smartphone giant easily survived the June pandemic in the quarter, according to a report on Thursday, with revenues of $ 59.7 billion, which was conveniently above forecasts even earlier this year, before analysts cut their forecasts for reporting closed stores, lower budgets and other impacts of COVID-1


See also: Apple wins profits and announces division of shares, sending shares to record highs

“Apple’s results have been incredibly strong even when one thinks the COVID-19 pandemic is even more impressive,” wrote Citi analyst Jim Suva, who reaffirmed a stock buy rating and raised his price target to $ 450 from $ 400. .

Piper Sandler analyst Harsh Kumar took a similar view.

“Overall, the pandemic seems to have a limited impact on Apple,” he said in a note to customers. “In fact, it can be said that the Mac and iPad actually benefit well from working on home trends and distance learning trends.”

Mac revenue rose to $ 7.1 billion from $ 5.8 billion, while iPad revenue rose to $ 6.6 billion from $ 5 billion.

Kumar joined the company’s expectations for a strong school return season this year and raised its price target to $ 450 from $ 310, while maintaining a stock overweight rating.

RBC Capital Markets analyst Robert Mueller wrote that the iPhone SE helped Apple reach a new high for its installed base, contributing to smartphone trends that make it “continue to gain confidence behind Apple’s ability to manage recurring cash flows from its loyal customer base ”.

Mueller is optimistic about smartphone trends over the next few quarters, even as Apple confirms that its next phone will be “a few weeks” slower than last year when it began selling its new models in late September. This will require the next version of the iPhone in Apple’s next fiscal year, which begins in October.

“Remember that the iPhone X, an expected upgrade of the form factor, was released in early November and resulted in a still record quarterly result in iPhone revenue,” he wrote. “Despite expectations for a 5G upgrade, Apple expects the iPhone’s recent performance (which exceeded expectations) to continue into the next quarter.”

It valued the stock with better results, while raising its price target to $ 445 from $ 390.

Read: Pandemic? Antitrust? No worries about Big Tech, which has amassed $ 200 billion in sales anyway

JP Morgan’s Samik Chatterjee wrote that Apple “surprised even bullish expectations of F3Q / C2Q gains by almost losing”, and he was optimistic about management’s tone for the current quarter.

“Overall, Apple’s ability as a company in the consumer discretionary product segment to completely break the consistent slowdown of F3Q / C2Q, despite the huge interruption, speaks volumes about the usefulness of consumers with products, as well as product cycle dynamics that make them are ready to circumvent the traditional practice of buying from the physical channel when necessary, and lead us to be more optimistic about the upcoming 5G product cycle, “writes Chatterjee, who has a rating of overweight in stock and who hit his price target up to $ 460 from $ 425.

Chatterjee said Apple also has an “underestimated corporate opportunity” as more people use Macs and iPads for remote work.

“While the strength for the quarter was expected, driven by management’s guidance for the latest earnings call, guidelines for share growth trends in F4Q are likely to surprise investors, as most likely expected it to be a one-time backwind for these products. “He wrote.

T. Michael Walkley of Canaccord Genuity was also encouraged that the company expects double-digit growth for all hardware categories except the iPhone in the quarter of September, and he praised the results of the “blowout” for June until raising its price target to $ 460 from $ 440 and maintaining a stock purchase rating.

See also: US economy falls by a titanic 32.9% in the second quarter and indicates a withdrawn recovery

At least 19 analysts raised their price targets for Apple shares after the report, according to FactSet, and the new average target is $ 397.65. Of the 38 analysts tracked by FactSet that cover Apple stock, 26 rated it as a purchase, eight rated retention and four rated the sale.

Apple plans to split its shares “four for one”, which will affect shareholders on the record from August 24. The stock will start trading on a split basis, adjusted on August 31. Citi’s move by Suva said it was “important for retail investors.” Apple said the split was aimed at making the shares “more affordable.” for a wider investor base. “

Shares have risen 39% in the last three months as Doia Jones Industrial Average DJIA,
+ 0.43%
has grown by 8%.

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