One Reason Why Apple (AAPL) Stock Is Higher Today
NEW YORK (TheStreet) -- Shares of Apple (AAPL) - Get Report are advancing 0.74% to $96.65 in afternoon trading on Friday after Raymond James hiked its 2017 iPhone unit estimate to 231 million units from 216 million on expectations for more sales driven by model upgrades, Barron's reports.
But the firm, which has a "market perform" rating on shares of the iPhone maker, cut its per-share earnings estimates for the September quarter due to excessive consensus expectations for gross margin.
Raymond James now projects per-share earnings of $1.41 for the quarter, down from its previous estimate of $1.56. The firm has forecast $45.04 billion in revenues, below consensus for $46.3 billion, Barron's adds.
"[W]e are assuming the GM compression with the iPhone 7 will be slightly better than typical for Apple, at 150 bp down in September and another 50 bp down in December," Raymond James said.
"Of note, based on data from FactSet, consensus GM for Apple is for an increase in both September and December, which we are not sure has ever happened during a year in which Apple is refreshing iPhone hardware," the firm added.
(Apple is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Apple's strengths such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: AAPL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
in