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4 Things To Watch For On Apple's Q1 Earnings Call

The sell-side is unequivocal about a pickup in Apple Inc.'s (NASDAQ: AAPL) iPhone momentum, and have scrambled to upwardly revise iPhone shipment estimates and price targets for the shares.

Benzinga · 01/21/2020 19:03

The sell-side is unequivocal about a pickup in Apple Inc.'s (NASDAQ: AAPL) iPhone momentum, and have scrambled to upwardly revise iPhone shipment estimates and price targets for the shares.

On the heels of his recent positive price target and estimate revisions, an analyst at DA Davidson is bracing for strong results from the tech titan. Apple is expected to release its fiscal first-quarter results on Jan. 28.

4 Things To Watch

Apple is poised to report favorable operating results, thanks to strong growth in its emerging efforts such as its Apple Card in financial services and hardware outside of smartphones such as AirPods and Apple Watches, Tom Forte said in a note.

The analyst estimates first-quarter sales of $88.03 billion, representing 4.4% growth but trailing the consensus estimate of $88.33 million. EBITDA is expected at $27.31 billion, in line with the consensus, and EPS at $4.47, shy of the consensus estimate of $4.53.

See Also: Apple Analyst Says 2020 iPhone Shipments Tracking Ahead Of Expectations On Strong Global Demand

Forte listed the following as things he would focus on when the company hosts its earnings call:

  1. Next-gen wireless network: Forte would look for any management comment on its plan to capitalize on 5G.
  2. Emerging efforts: DA Davidson sees emerging efforts such as proprietary content, financial services, including payments and credit cards and healthcare, as meaningful growth drivers for 2020
  3. Apple Card: Forte would look for comments on how Apple Card, which was launched for U.S. consumers in August, is faring. The analyst would be interested in knowing whether the company is able to drive smartphone sales by offering consumers installment payments with no interest when they use the card.
  4. Non-iPhone hardware: The analyst expects the company to offer positive comments on non-smartphone hardware products such as AirPods Pro and Apple Watches that seemed to have had strong holiday sales.

Forte reiterated a Buy rating and $375 price target for Apple.