Bernstein Keeps Outperform Rating on Apple with $370 Target, Bullish on Earnings Resilience

Deep News16:11

On November 3, Bernstein reiterated its "Outperform" rating on Apple (AAPL) and maintained a price target of $370.

The firm believes Apple delivered strong results in its fourth fiscal quarter, with revenue rising 12% year over year to $114.5 billion, beating Bernstein's estimate by 1.6% and the market consensus by 0.9%. Diluted earnings per share came in at $2.10, surpassing Bernstein's forecast by 6% and the market consensus by 5%.

Within that, iPhone revenue grew 17% year over year, above the prior expectation of around 15%. Services revenue rose 10%, or roughly 12.5% when excluding unfavorable currency effects.

On profitability, Apple's fourth-quarter gross margin reached 47.9%, at the upper end of the company's previous guidance range, while its operating margin hit 31.1%, also ahead of expectations.

However, Apple expects revenue for the December quarter to grow 7% to 10% year over year, with services growth of 8% to 9%, while gross margin is projected to decline to 45% to 46%, below Bernstein's forecast of 46.2% and the market consensus of 46.7%.

The company said rising memory chip costs are the primary pressure on gross margin.

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