Bernstein Analyst Up on Apple June-Quarter, Down on Next Several
19 JULY 2022 - Hedging his bets for the near term and being just so “him” going forward - ladies and gentlemen, word on the latest words from Bernstein research analyst Toni Sacconaghi. Barron’s (via Apple Stocks) has written up the latest from the Sacconator. Basically, he thinks the Street is too pessimistic about the June-quarter and too optimistic about the next few quarters to follow. On June numbers, the piece says:
…Apple had warned that supply constraints could reduce revenue in the quarter by $4 billion to $8 billion; Sacconaghi thinks the actual impact might be at the low end of the range or below.
“Meanwhile,” the piece goes on to say:
…he thinks that Apple could outperform consensus estimates for both Mac and iPad sales. He sees Mac sales up 13%, above the Street’s consensus forecast at 3%, and projects iPad growth of 9%, far above the Street consensus forecast for a decline of 6%.
Given those numbers, Sacconaghi has raised his June-quarter expectations. He had been looking for revenue of $82.8 billion. He’s upped that to $84 billion - higher than the Street’s expectation of $82.4 billion. He’d also been looking for earnings per share of $1.17. He’s raised that to $1.19 - well above the Street’s expectation of $1.15.
After that though, Ragnarok. While things do seem to be straightening out for the supply chain, Sacconaghi says “incremental consumer weakness” and foreign exchange headwinds could rain on future results parades. He doubts Apple will offer financial guidance, given #TheseTimesInWhichWeLive. That said, Barron’s says he does think “that any hints that growth in the September quarter could be in the high single digits or better would be viewed positively by the Street.”
Past the very near term, he’s still pretty Sacconaghi. With worry about consumer spending weakening in fiscal year 2023, his take on Apple is “neutral to modestly negative” for the next six-months to two-years. Quoting his note again:
We worry that growth…may slow as consumers are increasingly pressured by inflation and rising rates.
(…)
Apple is consumer-centric, and is highly transactional, with less than 10% of its revenue and profits being recurring, meaning it could be vulnerable to a downturn.
Sacconaghi has a “Market Perform” rating on Apple shares. His price target on the shares is $170.
