5 Apple Analysts On Q4 Earnings Beat: 'Consumer Staple-Like Demand Characteristics'

Apple Inc AAPL shares traded higher by 7.8% on Friday after the company reported a fourth-quarter earnings beat but said iPhone sales and Services revenue came up short of expectations.

Several Wall Street analysts have weighed in on Apple's mixed quarter.

Apple's Differentiated Model: Rosenblatt Securities analyst Barton Crockett said Apple differentiated its resilient business model from many of its big tech peers in the fourth quarter.

"This report is supportive of our view that Apple's products have consumer staple-like demand characteristics that will support the business during a tough macro period, and be helpful for the shares," Crockett wrote.

Raymond James analyst Melissa Fairbanks said Apple faces a number of potential consumer demand headwinds in the near-term.

"That said, with AAPL representing something of a core holding, we expect shares to continue to be a relative outperformer despite market volatility," Fairbanks wrote.

Needham analyst Laura Martin said Apple once again reported its installed base of active users reached a record high in the fourth quarter thanks to a record number of upgrades and double-digit growth in Android switchers.

"We argue that the best way to think about AAPL’s valuation, pricing power, competitive advantage period and barriers to entry is through the lens of 1B+ of the wealthiest consumers in the world, each using AAPL devices 4-5 hours per day," Martin wrote.

Challenges Remain For Cupertino: Bank of America analyst Justin Post said Apple executed well relative to its big tech peers, but it still faces "challenges around the corner" in fiscal 2023.

"We model 4% rev growth for Dec qtr (with 7-8% benefit from an extra week), which sets the trajectory for March and June to be down y/y for products and services," Post wrote.

Morgan Stanley analyst Erik Woodring said Apple's fourth-quarter numbers were solid and its guidance was better than some investors had feared.

"A Sept Q beat and in-line to above Street Dec Q guide illustrates the consistency of Apple's ecosystem, especially compared to a challenging Megacap tech earnings season," Woodring wrote.

AAPL Ratings, Price Targets:

• Bank of America has a Neutral rating and $160 target.
• Morgan Stanley has an Overweight rating and $177 target.
• Raymond James has an Outperform rating and $185 target.
• Rosenblatt Securities has a Buy rating and $189 target.
• Needham has a Buy rating and $170 target.

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