Canaccord Genuity Adjust Apple Expectations Up Ahead of Thursday Earnings
25 JULY 2022 - One Apple watching investment house has decided it was wrong about Apple’s June-quarter before Apple actually tells them how it went. Apple 3.0 ran part of a note from Canaccord Genuity analyst T. Michael Walkley on Friday. While he did not change his rating nor his price target on the company’s shares, he did up his expectations for last quarter, saying that his firm’s previous, below consensus numbers were a little low. Points of note from his note:
He expects to see “improving iPad sales in part due to improving supply”
He says “Apple is well-positioned to continue to benefit from the 5G upgrade cycle”
He says iPhone demand looks to have been “more resilient” than his firm expected
He thinks Apple’s supply headwind of $4B to $8B will come in at the low-end of that range
Going forward, he and his “expect the higher-margin services revenue growth to outpace total company growth and drive gross margin expansion.” Apple’s still got $73B in cash it can use to “invest and support long-term growth.” And Apple customers will stay loyal. Quoting the note:
With the 5G upgrade cycle likely a benefit for the next several years, other hardware categories growing double-digits, and continued mix shift towards high-margin services, we believe the share price is compelling for longer-term investors.
Walkley has a “Buy” rating on Apple shares. His 12-month price target on the shares is $200.
Call Incoming
It’s getting down to crunch-time for notes such as these. Apple earnings for the June-quarter - the third quarter of fiscal year 2022 - are due in this week. Numbers for last quarter will hit Apple’s site after the close of trading at 1:30 Pacific/4:30 Eastern this Thursday 28 July. A bit later - 2PM Pacific/5PM Eastern, Apple CEO Tim Cook, Apple CFO Luca Maestri, and folk from the financial front will do the conference call thing. You can hear that as it happens on Apple’s Investor site. Apple will make it available as a podcast soon after. And - of course - we will recap the call here on Friday.
