Apple’s Price Target Gets Raised Following Strong Earnings Performance

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Apple has once again shown its resilience by surpassing expectations in both revenue and earnings, leading to a 6% surge in after-hours trading. The company’s fiscal first quarter results revealed revenue of $90.75 billion and earnings per share of $1.53, beating estimates. Its gross margin also saw an expansion. Apple’s strong position in hardware and services, along with its focus on customer experience, has earned it a solid market presence and pricing power. The company announced a massive $110 billion share repurchase authorization, setting a new record in corporate buybacks. With positive developments on the horizon, we have revised our price target for Apple to $220 from $205. Cash Flow and Capital Allocation Despite slightly lower operating cash flow, Apple’s free cash flow exceeded expectations, allowing for significant returns to shareholders through dividends and buybacks. With a solid net cash position and a commitment to shareholder value, Apple continues to prioritize capital allocation efficiently. Quarterly Performance Apple’s services segment achieved a new revenue record, offsetting a minor decline in product sales. The company reported record performance across various markets and products, with strong demand for its iPhone and Mac products. Apple’s wearables and accessories segment faced tough year-over-year comparisons but still maintained solid customer engagement. Services revenue saw significant growth, driven by an expanding user base and rising subscription numbers. Looking Ahead The company’s guidance for the upcoming quarter anticipates growth in revenue and services, surpassing analyst expectations. Apple’s proactive approach to innovation, such as its artificial intelligence initiatives, is expected to further enhance its market position. The company’s continuous investment in R&D and commitment to user privacy are key strengths that differentiate it from competitors. Through strategic capital allocation and a focus on customer satisfaction, Apple remains a top player in the tech industry.

Tim Cook, chief executive officer of Apple Inc., arrives for opening ceremony of the new Apple Jing’an store on March 21, 2024 in Shanghai, China.

Vcg | Visual China Group | Getty Images

Apple did it again: Despite all the worries about China, the consumer tech giant hit back with beats on the top and bottom lines, sending shares up 6% in after-hours trading.

This is why we own it. This is why we don’t trade it.

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