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Apple on Thursday reported March quarter results that beat expectations, but noted the June quarter could be a tougher period. Here’s what analysts thought about Apple’s Q2 and how they see Apple faring in Q3.
As has been typical during the pandemic, Apple did not provide formal revenue guidance for the June quarter. However, Apple executives noted that the company is expecting a revenue hit between $4 billion and $8 billion during the period because of Covid disruptions and supply issues.
Here’s what analysts thought about Apple’s March quarter performance, as well as their forecast for the company going forward.
Katy Huberty, Morgan Stanley
Morgan Stanley’s lead analyst, Katy Huberty, noted that Apple’s March quarter results were better than expected. However, her outlook for the June quarter is much more cautious.
Huberty trimmed her June quarter revenue by 3% as a result of ongoing chip supply constraints and more recent manufacturing disruptions because of the Covid-19 situation in China. Her quarterly revenue forecast for Q3 2022 fell to $81.1 billion from $83.3 billion
However, the analyst still believes that Apple is a “beacon of stability” despite the challenges. While it isn’t immune from macroeconomic factors, the analyst says that Apple remains her top IT Hardware pick for the year.
The analyst lowered her 12-month Apple forecast to $195, down from $210, because of the disruptions.
Harsh Kumar, Piper Sandler
Harsh Kumar of Piper Sandler noted Apple’s strong March performance that landed above Wall Street expectations, but he focused more on the company’s upcoming June quarter and potential revenue impacts.
The analyst notes that Apple is facing headwinds from both foreign exchange rates and a sales ban in Russia amid the crisis in Ukraine. Additionally, he notes that Apple acknowledged a $4 billion to $8 billion revenue hit in the June quarter from Covid disruptions and silicon shortages.
However, despite the headwinds in Q3 2022, Kumar says he’s pleased with APple’s execution in the March quarter and is hopeful that the Covid impact is largely in the past for Apple and that supply conditions improve materially in the second half of 2022.
The analyst maintains his 12-month Apple price target of $195.
Samik Chatterjee, JP Morgan
Apple’s performance in the March quarter underlines why it’s treated as a “safe haven” by investors, JP Morgan analyst Samik Chatterjee said. Apple managed to deliver upside despite a tough macro environment.
Despite the great execution in the March quarter, Chatterjee believes that the upcoming June quarter could demonstrate that the company isn’t immune to difficulties in the macro environment. He believes there will be limiting factors on the execution-led upside in the June quarter.
Looking ahead, Chatterjee still sees positives. He points to the current robust iPhone product cycle and the resilience of demand despite a shift in consumer spending.
The analyst raised his 12-month Apple price target to $205, up from $200.
Gene Munster, Loup Ventures
Gene Munster, partner and analyst at Loup Ventures, believes that chatter about supply chain issues is distracting investors from the big picture. According to the analyst, supply chain discussion “masks the pace of intrinsic growth, making it difficult to discern the health of the business.”
Munster thinks that the issue is blown out of proportion. He says that loyal Apple customers are not jumping ship because they can’t get a new product in a timely manner. He says that “Apple makes the best consumer tech products in the world, and consumers are willing to wait to get them.”
That fact is why Apple can report a 9% revenue growth in the March quarter amid global uncertainty and tough macroeconomic conditions.
Munster believes that Apple shares are headed to $250 in 2023.
Daniel Ives, Wedbush
Wedbush analyst Daniel Ives praised Apple’s performance in Q2 2022, noting that the company beat across all categories except for a couple that were heavily impacted by supply constraints. The performance provided a “sigh of relief” for both the tech sector, as well as Wall Street.
Looking ahead, Ives says that the “albatross” for the June quarter could be the expected $4 billion to $8 billion revenue hit from Covid disruptions. Ives believes the issues could peak in the June quarter before subsiding later in the year.
Additionally, he believes Wall Street could digest that Apple’s numbers would be much higher without the revenue hit — a fact that speaks to the “Teflon-like demand story” at the company.
Ives reiterates his 12-month Apple price target of $200.