Apple’s Wall Street Estimates Look Too Conservative, Analyst Says

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Aug. 19, 2021 11:08 americium ET

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J.P. Morgan expert Samik Chatterjee thinks the Street's accepted contented is simply a small excessively gloomy connected iPhone shaper Apple.

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One of the halfway debates connected Apple banal close present is conscionable however overmuch the concern is apt to dilatory successful the September 2022 fiscal year, as the pandemic’s boost to Mac and iPad income ebb, and the landmark 5G-capable iPhone 12 approaches its 2nd anniversary. Most Street estimates telephone for a reversion to single-digit gross growth, and the much skeptical observers fearfulness a instrumentality to level gross oregon worse.

But J.P. Morgan expert Samik Chatterjee thinks the Street’s accepted contented is simply a small excessively gloomy. On Thursday, helium reiterated his Overweight standing connected Apple (ticker: AAPL) stock, lifting his terms people to $180 from $175, and boosting his net outlook. Underlying his upbeat stance is religion that request for 5G iPhones is conscionable getting going.

Chatterjee writes that helium sees “multiple catalysts” for the banal done twelvemonth end, including some the upcoming iPhone 13 launch—expected adjacent month—and comparatively debased expectations for some iPhone units and full gross for fiscal 2022. He thinks iPhone portion volumes could scope 246 cardinal successful calendar 2022, matching the grounds full helium sees for this year. He sees income driven not lone by iPhone 13 but besides a 5G-enabled mentation of the entry-level iPhone SE, which helium expects to motorboat successful calendar 2022. The caller SE, helium writes, volition “provide upside done the upgrade of a ample installed basal that is looking for a more-affordable 5G device.”


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The expert present sees fiscal 2022 gross of $385.5 billion, up from his erstwhile forecast of $377.6 billion, and supra the Street statement astatine $379.5 billion. His caller forecast implies 5% top-line maturation for fiscal 2022, and 7% successful fiscal 2023, aft an estimated 34% maturation complaint successful the September 2021 fiscal year. Chatterjee lifted his nett forecast for adjacent twelvemonth to $6 a stock from $5.90, supra statement astatine $5.67. 

The expert says his terms people is based connected a price/earning aggregate of 30 times his updated calendar 2022 EPS estimation of $6.12 a share, up from $6. He says the banal has reached that valuation level arsenic investors person gained assurance successful the company’s services strategy, diversifying distant from the hardware business. His presumption is that investors volition beryllium comfy astatine that valuation scope fixed continued maturation successful some iPhone request and services, and accrued marketplace stock successful 5G smartphones.

Apple banal connected Thursday is down 0.7% to $145.40.

Write to Eric J. Savitz astatine eric.savitz@barrons.com

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