Apple's holiday quarter earnings will be released soon

Many Wall Street analysts predict that its quarterly revenue is expected to exceed $100 billion for the first time, and are optimistic about the prospects of its hardware business including iPhone, Apple cars, and Apple's service business including app stores.

On January 26, Apple has announced that it will release the first fiscal quarter of fiscal 2021 (the fourth quarter of 2020) on Wednesday, local time in the United States. Many Wall Street analysts predict that its quarterly revenue is expected to exceed $100 billion for the first time. Its hardware business, including iPhone and Apple Cars, and Apple's service business, including app stores, have raised their target stock prices and performance expectations.

1) Wade Bush: Super upgrade cycle becomes a reality, target stock price is raised to $175

Daniel Ives, chief analyst at Wedbush Securities, has raised Apple’s target stock price for the next 12 months to $175 due to the company’s upcoming iPhone shipments in the first fiscal quarter of 2021. Both volume and revenue will reach jaw-dropping levels.

In a report to investors, Ives wrote that Wade Bush’s recent survey of Apple’s product supply indicated that "the hype of the iPhone 12 super upgrade cycle has become a reality." The analyst believes that Apple’s supply chain shows that iPhone production is between 90 million and 95 million units, which is about 35% higher than Ives’ initial forecast.

Ives pointed out that Wall Street’s current forecast is that Apple’s iPhone sales in 2021 will reach 220 million units. But he believes that according to Apple's current trends, Apple may sell more than 240 million iPhones this year. He added that under bullish conditions, it may even reach 250 million units.

Ives wrote: "The most important thing is that, according to our estimates, 350 million of the 950 million iPhones worldwide are currently in the upgrade window. We believe this will translate into an unprecedented upgrade cycle for the company led by Cook. "In addition, Ives said that if Apple continues to maintain its growth momentum, its market value may reach $3 trillion within a year.

Ives has raised Apple's price target for the next 12 months from $160 to $175. The new target is based on the sum of Wade Bush’s 2022 estimates. The price-to-earnings ratio of Apple’s services is 16 times, which is approximately US$1.2 trillion; the price-earnings ratio of Apple’s hardware business is 7 times, which is approximately 1.9. Trillions of dollars.

2) JPMorgan Chase: Revenue in the first quarter of 2021 exceeds $100 billion

JP Morgan analyst Samik Chatterjee predicts that thanks to the strong demand for the iPhone 12 and the continuation of the remote work trend, Apple’s 2021 fiscal first quarter (the fourth quarter of 2020) Revenue is expected to exceed US$100 billion for the first time.

In a report to investors, Chatterjee said that Apple's revenue for the first quarter of 2021 is estimated to be based on the strong demand for the 5G iPhone 12 and iPhone 12 Pro lineups, as well as the continued positive impact of remote work and education trends.

These areas drive JP Morgan Chase’s revenue estimate of $110 billion for Apple and an estimated earnings per share of $1.56. Both of these figures are higher than Wall Street's widely expected US$102 billion and US$1.41.

Chatterjee predicts that Apple reported about 80 million iPhone shipments in the first fiscal quarter, which may bring about $66 billion in revenue for this segment. He said that a better combination of iPhone 12 Pro and iPhone 12 Pro Max devices could also mean a higher average selling price (ASP) than analysts generally expected.

In addition, the analyst added that the trend of working from home during the new crown pneumonia epidemic may be a greater upward momentum than investors expected. Recent Mac shipment reports and iPad supply chain surveys support this theory.

Finally, Chatterjee said that the recent data released by Sensor Tower also supports the continued acceleration of Apple's service department, especially the App Store. He predicted that by 2021, the high growth trend will continue into 2021.

The analyst maintained Apple’s target price of $150 for the next 12 months unchanged, which was calculated based on 2022 earnings per share of $4.90 and a 31 times mixed price-to-earnings ratio. As of press time, Apple's share price is currently $141.22 per share, an intraday increase of 1.62%.

3) UBS: Upgrading revenue estimates. Strong sales of iPhone 12 and Mac are stronger than expected

Investment bank UBS (UBS) raised Apple's first-quarter revenue forecast, citing better-than-expected iPhone shipments, average selling prices, and Mac sales.

In a report to investors, UBS analyst David Vogt raised Apple's revenue forecast for the first quarter of fiscal 2021 to $106.9 billion from $98.9 billion. He also raised his earnings per share estimate from $1.35 to $1.45.

The analyst predicts that iPhone shipments in the first fiscal quarter will reach about 78.5 million units, which is about 5 million higher than his previous forecast of 73.5 million. This number is also higher than the shipments in the same period in 2016, after Apple's mobile phone shipments in the first fiscal quarter have declined for three consecutive years.

As consumers tend to buy iPhone12 Pro and iPhone12 Pro Max, coupled with high shipments, the average selling price of Apple mobile phones is higher than expected. Vogt expects that Apple’s iPhone revenue for the first fiscal quarter will be $63.8 billion, much higher than his previous forecast of $58 billion, and also higher than Wall Street’s consensus estimate of $59 billion.

The analyst also believes that Mac shipments may be around 6.9 million units, an increase of 3% from the previous month. These figures may drive Mac revenue to around 9.5 billion US dollars, 10% higher than market consensus.

In addition, UBS is modeling the total shipments of Apple's iPhone in 2021, which is expected to be 215 million units. This means that after 2020 shipments of approximately 190 million units, this number will increase by 13.5% year-on-year.

The higher average selling price ($812.5) also shows that Apple’s iPhone 12 Pro model accounted for about 37.5% of the first-quarter shipments, which is higher than the 30% of the high-end iPhone 11 sales in 2020. He believes that iPhone 12 sales will account for about 75% of all iPhone shipments during the holiday season.

Vogt maintains Apple's target price of $115 in the next 12 months, citing a 27 times P/E ratio of $4.23 in its 2022 earnings per share forecast.

4) Cowan: China is the biggest bright spot in raising iPhone 12 production forecast

Cowen analysts said that high demand for the iPhone 12 prompted Apple to increase its production orders in the first quarter of this year. It is said that sales in China were a highlight of the quarter's earnings report.

In an updated report on smartphone manufacturing, Cowan analysts said that they have raised their forecasts for the first quarter for the third consecutive month. Cowan currently believes that Apple intends to produce 55 million iPhones this quarter, an increase of 49% year-on-year, which is higher than the 51 million that the company predicted a month ago.

The increase in shipments is due to increased demand for three of the four iPhone 12 models. It is said that the sales of the iPhone 12 itself increased by 2 million units, while the iPhone 12 Pro and iPhone 12 Pro Max each increased by 1 million units. . It is speculated that the iPhone 12 mini forecast has not changed from Cowan's previous forecast.

One of the highlights of the investigation is said to be Apple's performance in China. The latest data shows that iPhone sales in China in December last year were 6 million units, which is the highest level for Apple in many years and represents a 20% market share.

The good news for China comes at a time when overall smartphone shipments in China have declined. In December last year, shipments fell by 10% month-on-month and 13% year-on-year to 26.6 million units. About 6 million of them are foreign brands, of which Apple occupies the vast majority of this market segment.

It is said that the total output of Apple's iPhone in the first fiscal quarter was 79 million units, a year-on-year increase of 13%. It is said that the proportion of iPhone 12 sales is more concentrated than usual, and the new models are considered to account for 82% of the total sales of the season, higher than the average level of 74% in the past two release cycles.

It was previously reported that Apple will increase orders in the first half of 2021, an increase of 30% year-on-year, which will encourage new models to account for a larger proportion of iPhone sales.

5) Evercore: The target stock price is raised to $160, optimistic about the outlook of Apple Cars

According to Evercore ISI analyst Amit Daryanani (Amit Daryanani), Apple may use Apple cars to disrupt the automotive industry, just as it uses the iPhone to disrupt the smartphone industry. In his latest research report, he said: "The iPhone is the computer in your pocket, and the car will be the computer on the wheel."

Darianani believes that the possibility of Apple launching self-driving electric cars in the next five years and providing passengers with a series of services to make money "has greatly increased." He estimated that the auto business could increase Apple's sales by $36 billion. Apple expects total revenue for the 2020 fiscal year of 274.5 billion US dollars.

Earlier this month, it was reported that the development of Apple cars is still in the early stages and it will take at least five years to be available. According to people familiar with the matter, the company is also studying building self-driving car systems for third-party partners (rather than Apple cars).

Darianani raised Apple's target stock price for the next 12 months to $160 per share.