7 Apple Analysts Size Up Q4 Earnings: iPhone Strength, China Fears Overblown, Buy On The Dip Like Buffett

Technology giant Apple Inc AAPL reported fourth quarter financial results Thursday after market close.

Here's a look at what analyst are saying about the results and the future of the company.

The Apple Analysts: Goldman Sachs analyst Michael Ng had a Buy rating and a price target of $227.

Oppenheimer analyst Martin Yang had an Outperform rating and a price target of $200.

Wedbush analyst Dan Ives had an Outperform rating and a price target of $240.

Rosenblatt analyst Barton Crockett had a Neutral rating and lowered the price target from $198 to $189.

Raymond James analyst Srini Pajjuri had an Outperform rating and lowered the price target from $200 to $195.

Needham analyst Laura Martin had a Buy rating and a price target of $195.

Bernstein analyst Toni Sacconaghi had a Market Perform rating and a price target of $195.

Related Link: Apple Q4 Earnings Preview: All Eyes On iPhone 15

Goldman Sachs on Apple: The fourth quarter from Apple saw "strong iPhone results," Goldman Sachs analyst Michael Ng said.

The analyst also highlighted the "sharp acceleration" in Apple's Services revenue.

"iPhone installed base continues to compound, with the iPhone active installed base reaching a record F4Q23 and benefitting from a record number of switchers in F2023 driven in part by expansion into emerging markets and a growing installed base in Apple Watch, Mac, and iPad," Ng said.

Ng said Apple's active installed base for devices hit a record high along with iPhone installed base hitting records.

Oppenheimer on Apple: The fear of losing iPhone market share in China could be overblown according to Oppenheimer analyst Martin Yang.

"Fears of iPhone's share loss in Mainland China to Huawei seem overblown, when iPhone likely gained share in F4Q," Yang said. "We expect investor concerns over China share loss to mostly dissolve heading into FY24."

The analyst said the results and forward guidance were solid given a "very tough macro backdrop."

"We continue to favor its long-term growth potential, and unchallenged market positioning."

One concern from Yang is the deceleration of iPad, Wearables and Accessories expected due to product launch timing.

Wedbush on Apple: Strong demand for the iPhone 15 in China was a key highlight in the fourth quarter for Wedbush analyst Dan Ives.

"While overall China revenues missed the Street in the September quarter this was due to softer Mac/iPad sales which marks the underlying growth the Street is truly focused on," Ives said.

The analyst said the "star of the show" for the fourth quarter was the Services segment, which was up 16% year-over-year and beat analysts' estimates.

Ives said analysts would "breathe a sea of relief" from the China demand and December quarter iPhone guidance.

"Underlying iPhone and Services growth looks relatively healthy in the holiday quarter and generally in-line with whisper numbers."

Ives said the iPhone China demand concerns "was a great fictional story by the bears" and said it is far from reality.

"China growth remains strong and a key asset for the core iPhone franchise."

Rosenblatt on Apple: The fourth quarter results have Rosenblatt analyst Barton Crockett remaining cautious about the long-term estimates for the company.

The analyst noted iPhone sales were better than his projection, but came in below consensus estimates. Mac and iPad sales were also worse than feared.

Crockett also said results from China didn't do enough to minimize concerns.

"We admire Apple's position as the maker of the world's most important device, the iPhone. But, without disruptive new products, sales seem to be stuck in a muted place," Crockett said.

Raymond James on Apple: Services and China were areas of strength from Apple for Raymond James analyst Srini Pajjuri.

"iPhone was in-line and more importantly, China was an area of strength, which should help allay recent slowdown concerns," Pajjuri said.

The analyst said it was encouraging to see higher margins for the Services segment along with the revenue growth.

While Pajjuri reiterated an Outperform rating, several estimates were revised down on Apple's future along with the price target.

Needham on Apple: Strong gross margins in the fourth quarter was a key takeaway from Needham analyst Laura Martin.

The analyst said the margins were driven by cost savings and a shift toward the Services segment.

iPhone sales and results in China and India were other keys for Martin.

"Apple has a very low share in the very large India market, so it has a lot of growth headroom. India has many folks moving into the middle class, and AAPL has opened two stores there that are doing well," Martin said.

One negative for Martin from Apple was the topic they didn't spend enough time talking about.

"The most defeating silence on the call was about Generative AI. In answer to a question, AAPL side-stepped by stating that it views old-school AI and ML as fundamental technologies in all its products, but said that products build on generative AI will come sometime in the future."

Bernstein on Apple: After the fourth-quarter results, Bernstein analyst Toni Sacconaghi questions if Apple will have another year of no growth ahead.

"Apple's guided below consensus revenues for the December quarter, largely driven by a weak iPhone cycle," Sacconaghi said. "The December quarter typically sets the tone for the year."

The analyst said the risk-reward on Apple shares could be closer to negative or neutral going forward and the stock is elevated compared to peers.

"We see Apple as a quality holding but encourage investors to ‘be like Buffett,' and buy on dips."

AAPL Price Action: Apple shares are down 0.70% to $176.32 on Friday versus a 52-week trading range of $124.17 to $198.23.

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