Apple could see 'upside if execution sustains Q1 growth,' J.P. Morgan says
Apple (NASDAQ:AAPL) is poised to see "upside" if it is able to execute and show the growth that it saw in its fiscal first quarter, according to a new investment note from J.P. Morgan.
Analyst Samik Chatterjee, who has an overweight rating and a $210 price target, took a look at the bull and bear case after surveying 15 buy-side firms and found that the "sustaining double-digit growth" is the bull case for shares.
"Sustaining double-digit growth through the year would require execution-led upside to implied guidance for [second-quarter] growth in the mid-single digit percentage, as well as higher-than-consensus growth rates in the following quarters of [third-quarter] and [third-quarter] (comps do get easier over second-quarter)," Chatterjee wrote in a note to clients.
Apple shares were lower in premarket trading on Monday, falling slightly more than 1% to $162.75.
The base case for fiscal 2022 calls for Apple revenue to grow between 5% and 10% year-over-year, the bear case calls for less than 5% growth, while the bull case is between 10% and 15% year-over-year.
Much of the growth will come from the iPhone, which the majority of the survey respondents said could see "mid-single digit growth."
"We see the combination of stronger than expected mix as well as volume upside from better iPhone 13 as well as iPhone SE demand to drive upside to our current estimates for modest revenue growth (+4% y/y)," Chatterjee added.
Apple was selected by Bank of America as one of the stocks that could benefit from "scarcity risk," as its devices and services continue to be a primary solution for entertainment and productivity tasks.