Apple Inc’s (NASDAQ:AAPL) better than expected quarterly results suggest Wall Street iPhone supply fears may have been overdone, so says Deutsche Bank.
Nonetheless, as the iPhone X goes on sale Deutsche analyst Sherri Scribner reckons investors still need answers.
“While the results were solid, we believe investors' main focus is on whether Apple can sell a $1,000 premium phone in significant quantities, something we won't have a good sense of until later this year, at the earliest,” Scribner said.
“Until then, we expect bulls and bears to remain in their own camps, with this quarter's results unlikely to sway view.”
Whilst retaining a ‘hold’ the investment bank increased its target price to US$152 from US$140 per share.
The analyst added: “We continue to view Apple as a trading stock, and believe shares will trade at the higher end of their historical range while current market multiples are elevated and the iPhone X remains in short supply.”
Better than expected results
In ‘after hours’ on Thursday the iPhone maker released expectation-beating fourth quarter results with adjusted earnings per share reported at US$2.07, which was markedly better than market consensus of US$1.87.
Apple stock rose more than 3% in the after-hours trading, changing hands at around US$173 per share.
Revenue in the three months to September 30 was nearly US$2bn higher than expected, at US$52.6bn versus US$50.7bn, with around 700,000 more iPhones sold than the market had predicted (total iPhone unit sales amounted to 46.7mln).
Apple said it now expects revenue between US$84bn and US$87bn for the quarter to the end of December, the first of its new financial year.
iPhone X on sale now
Although the iPhone 8 and 8 Plus have done better than investors expected, the release of the feature laden iPhone X is still likely to cast a substantial shadow.
Within hours of the quarterly results, newswires began filling up with the customary photos of long queues outside Apple stores in Australia, as consumers in Sydney were among the first to buy the US$1,000 handset over the counter.
iPhone X, the tenth anniversary model, became available for online pre-order last week, and in major markets - such as USA, UK, China, Australia, India and Japan - was launched in stores on the stroke of midnight.