By Sam Boughedda
(Updated - July 25, 2022 11:45 AM EDT)
Deutsche Bank analyst Sydney Ho maintained a Buy rating and $175 per share price target on Apple (NASDAQ:AAPL) in a note Monday, while JPMorgan analyst Samik Chatterjee maintained an Overweight rating and $200 per share price target ahead of the company's earnings release on Thursday, July 28.
Deutsche Bank analyst Ho stated that risks are rising, but also reflected in Apple's share price.
"We expect F3Q (Jun) results to be largely in line with DB/Street estimates showing low-single digit growth y/y despite macro uncertainties continuing to challenge consumer spending. We believe the company has managed its supply chain better than it planned a quarter ago, while it continued to gain share in an otherwise difficult quarter for smartphones and PCs," stated the analyst. "Looking forward, we expect AAPL's outlook to lean more cautious to reflect the current environment, which could lead to a guidance (if the company chooses to give one) below current DB/Street estimates."
Ho added that with the stock currently "trading at a more reasonable valuation (at ~23x CY23E EPS)" and Apple being viewed as a good hiding place in a volatile market, they are maintaining a Buy rating.
Meanwhile, JPMorgan analyst Samik Chatterjee maintained an Overweight rating and $200 per share price target on Apple, telling investors in a note that they believe the resilience of the earnings estimates in the backdrop of macro deterioration, including both inflation and adverse FX, will continue to drive investors to prefer Apple. Chatterjee added that at the same time, it has a strong cash generation and a balance sheet that will allow it to offset any earnings dilution on account of the macro through buybacks.
"We rate AAPL shares Overweight given our favorable outlook on iPhone and Services revenues relative to investor expectations, catalysts to accelerate revenue growth, and upside risk to our base forecast for ~10% earnings CAGR," explained Chatterjee. "We see upside on several aspects of the business as well as financials that remain underappreciated by investors, namely the transformation of the company to Services, growth in the installed base, technology leadership, and optionality around capital deployment – all of which together lead us to expect double-digit earnings growth and a modest re-rating for the shares."