Yahoo Finance Apple earnings preview: The iPhone metric that moves stock
On Monday tech investors around the globe will be glued to their computers and TV screens waiting for a quarterly report that’s arguably the most anticipated of the season. After the bell on April 27, Apple (AAPL) reports earnings.
Considering the colossus of Cupertino has advanced about 14% in three months, do shares have more room to run? Gene Munster, managing director and senior research analyst at Piper Jaffray is among Wall Street’s most followed Apple analysts. And he says when Apple releases earnings the metric that should move the stock involves iPhone sales. “That will determine how the stock trades over the next few quarters,” Munster said.
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However, it’s not how many iPhones Apple sold but how many Apple expects to sell in the months ahead that will matter to pros. “Wall Street wants to see if Apple is gaining market share. Guidance that’s slightly higher than what the Street expects will be viewed as a sign they’re gaining share. That’s the big factor," he said. "Investors want to see what the sustainability of the cycle may be.” And Munster went on to say that he thinks Apple will deliver. “I think they do guide higher.”
Turning attention to Street chatter suggesting Apple may be past its peak, Munster thinks a bet against Apple is a bet that won’t pay. “There was a bear case to be made a while back, when Apple started paying dividends,” he said, referencing critics who feared companies that paid dividends weren’t growing.
Now bears say Apple’s addition to the Dow Jones Industrial Average (^DJI) suggests it’s a mature company, and therefore out of growth. “Apple is still tapping into huge markets,” Munster countered. “And not only in smartphones, but also in wearables, TV and much more. There’s a lot of different places where this company can go.”
Munster also noted that he thinks a new Apple TV remains a key area for the company. “I know I’ve been wrong, but I still believe Apple is coming out with a panel TV in the near future.”
All told Munster is bullish on Apple. He rates the stock “overweight” with a price target of $160.
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