JPMorgan Says Apple’s Results Should Calm Investor Nerves
by Horace Dediu
On January 30, JPMorgan analyst Samik Chatterjee raised the price target on the stock to $325 while reiterating an “Overweight” rating. The firm is confident on the stock as it sees Apple results as reassuring for investors.
According to the firm, Apple’s latest financial results should help “calm investor nerves” about memory-related impacts on gross margins and concerns regarding a Services slowdown. This is despite the magnitude of iPhone revenue upsides, which is “noteworthy” itself.
JP Morgan also highlighted Apple delivering “record Product gross margins” in the December quarter, with the March quarter also anticipated to show record product gross margins.
This, the firm believes, should help investors be reassured regarding the materiality of the impact that investors have been concerned about related to rising memory costs.
“Record Product gross margins in the December quarter and an implied March quarter record Product gross margin should help reassure investors around the materiality of the impact that investors have been concerned about in relation to rising memory costs, even though management acknowledged slightly higher impact in March quarter than the December quarter.”
Our Take
Apple delivering “record Product gross margins” and guiding even higher is a jaw dropper. Especially as memory prices are soaring.
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