Apple Stock Slips After Earnings. Wall Street Isn't Worried
Apple stock is trading lower Friday despite the iPhone maker beating expectations for its fiscal fourth quarter, but analysts are still bullish.
Apple (AAPL) stock is trading in negative territory Friday even after the tech giant beat top- and bottom-line expectations for its fiscal fourth quarter.
In the three months ended September 28, Apple's revenue increased 6.1% year over year to $94.9 billion, boosted by 11.9% growth in its Services segment to $25 billion. The company said its earnings per share (EPS) improved 12% from the year-ago period to $1.64.
"Our record business performance during the September quarter drove nearly $27 billion in operating cash flow, allowing us to return over $29 billion to our shareholders [including through stock buybacks and dividends]," said Apple Chief Financial Officer Luca Maestri in a statement. "We are very pleased that our active installed base of devices reached a new all-time high across all products and all geographic segments, thanks to our high levels of customer satisfaction and loyalty."
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The results topped analysts' expectations. Wall Street was anticipating revenue of $94.6 billion and earnings of $1.60 per share, according to CNBC. Meanwhile, Services revenue came in just below expectations of $25.3 billion.
Apple also said that iPhone sales increased 5.5% to $46.2 billion, Mac sales were up 1.7% to $7.7 billion and iPad sales rose 7.9% to $7 billion. On the other hand, Wearables, Home and Accessories sales decreased 3% from the year-ago period to $9 billion.
Analysts were anticipating iPhone revenue of $45.5 billion, Mac revenue of $7.8 billion, iPad revenue of $7.1 billion, and Other products revenue of $9.2 billion.
Is Apple stock a buy, sell or hold?
Apple is up nearly 18% for the year to date on a total return basis (price change plus dividend) and Wall Street sees even more upside for the Dow Jones stock.
According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $241.84, representing implied upside of nearly 9% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Wedbush is one of the most bullish outfits on AAPL stock with an Outperform rating (equivalent to a Buy) and a Street-high $300 price target.
"In a nutshell, this was a rock-solid quarter for Apple, and the iPhone 16 launch appears to be off to a very good start," says Wedbush analyst Daniel Ives. "The step-by-step rollout of Apple Intelligence will result in a strong December quarter but will also flow into the March and June quarters, which should be good news for fiscal year 2025."
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