Apple Stock: What Wall Street Says About Earnings

Apple dropped the mic on fiscal Q3 earnings day. Today, the Apple Maven looks at what some Wall Street analysts have been saying about the results.
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Apple has dropped its fiscal third quarter results, and the numbers were nothing short of impressive. The Apple Maven summarized the three key takeaways from earnings day, and added that a material pullback in Apple stock  (AAPL) - Get Apple Inc. (AAPL) Report price would be an opportunity to buy.

Now, it is time to look at what Wall Street has been saying about the quarter, and whether analysts generally agree with the Apple Maven.

Figure 1: Apple logo.

Figure 1: Apple logo.

(Read more from the Apple Maven: Apple Stock: 3 Key Takeaways From Fiscal Q3 2021 Earnings)

Bulls remain bullish

One of the most optimistic analysts on the Street was Wedbush’s Dan Ives. He spoke with the Apple Maven a few days ago, and explained that the iPhone would likely beat by a few billion dollars this quarter on the back of a robust replacement cycle. He turned out to be right.

After seeing the numbers, the analyst seems as confident in the bullish thesis as he had been before. The “mic drop quarter” was particularly impressive if the supply chain issues are considered. Dan singled out Greater China as a big story of recovery, given mind-boggling segment revenue growth of 58%.

A couple of analysts that already had a buy rating on AAPL increased their price targets on the stock. Brian White, at Monness, now thinks that Apple shares should rise about 25% to a target of $184. Here is how the analyst summarized his views on the company and its recent results:

“The focus now turns to the iPhone 13. During this crisis, we believe Apple has enhanced its value proposition in the eyes of the world by introducing new innovations, supporting a more digital lifestyle, and attracting new consumers to Planet Apple. However, a shifting political landscape and society’s growing suspicion of Big Tech places Apple in a more vulnerable position than in past years.”

A word from the bear

Wolfe’s Jeff Kvaal is one of the few who think Apple stock has more downside risk than upside opportunity – I talked about his bearish case in more detail a few weeks ago. Ahead of earnings, the analyst was concerned that fiscal Q3 would “offer evidence Apple's pandemic surge is now ebbing.”

From my perspective, it has become even harder to see any sign of post-pandemic softness in demand for Apple’s products and services. Mr. Kvaal does not seem to fully agree, as the analyst has maintained his underperform rating on AAPL. He has, however, bumped his price target to $135.

Not much of a bear per se, BMO Capital’s Tim Long maintained his neutral stance on Apple stock. The analyst offered a very balanced view on the idea of owning shares. According to him, some skepticism is justified:

“[…] mainly on headwinds sustaining current demand levels including [the iPhone 13] cycle, tougher comps on Mac/iPad, regulatory overhang (App Store, Google [traffic acquisition costs]) as well as fair valuation.”

Twitter speaks

We recently asked Twitter if Dan Ives’ Street-high $185 price target on Apple stock might be reasonable, too optimistic, or not optimistic enough. Here are the responses:

Is the price right?

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)