Apple Inc. Just Beat EPS By 10.0%: Here's What Analysts Think Will Happen Next
Apple Inc. (NASDAQ:AAPL) just released its latest quarterly results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 3.9% to hit US$92b. Statutory earnings per share (EPS) came in at US$4.99, some 10.0% above what analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
View our latest analysis for Apple
Taking into account the latest results, the current consensus from Apple's 39 analysts is for revenues of US$285.2b in 2020, which would reflect a reasonable 6.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to increase 9.3% to US$13.86. Before this earnings report, analysts had been forecasting revenues of US$276.6b and earnings per share (EPS) of US$13.10 in 2020. It looks like there's been a modest increase in sentiment following the latest results, with analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
It will come as no surprise to learn that analysts have increased their price target for Apple 11% to US$325 on the back of these upgrades. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Apple, with the most bullish analyst valuing it at US$400 and the most bearish at US$167 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Apple's past performance and to peers in the same market. It's clear from the latest estimates that Apple's rate of growth is expected to accelerate meaningfully, with forecast 6.5% revenue growth noticeably faster than its historical growth of 4.8%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.4% per year. Apple is expected to grow at about the same rate as its market, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Apple following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Apple going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Apple's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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