By Senad Karaahmetovic
KeyBanc analysts reiterated an Overweight rating and a $177 per share price target on Apple (NASDAQ:AAPL) as the broker’s latest data shows healthy sales trends for the current quarter.
KeyBanc’s data shows Indexed Spending was -28% month-over-month (MoM) in January, better compared to the prior 3-year average of -36%.
“Coming off a historically stronger December, our data appears to be showing some momentum, which we believe suggests some of the supply disruptions in October/November were just pushed out to a later period. It is typical to see January/February trend negative on a m/m basis in our data,” analysts said in a client note.
At the moment, Street consensus expects a higher growth quarter than AAPL's historical average (-25% vs -31%). KeyBanc is in line with consensus for iPhone estimates, slightly below on Mac/iPad, and above on Wearables. Overall, hardware revenue estimates “look appropriate.”
“We continue to believe that AAPL remains highly resilient to the macro as the user base continues to grow and recently surpassed 2.0B. We believe a catalyst for that growth could be around China reopening and recent reports suggesting retailers are discounting the iPhone. Further, AAPL's margins continue to improve with mix shift and higher levels of iPhone sales in international markets. AAPL's ROIC are superior to peers and AAPL has continued to pursue shareholder-friendly capital returns that have returned over $700B over the past 10 years, by our estimates," analysts added.
They have a $177 per share price target on Apple stock, which is up 18.4% year-to-date (YTD).