Shareholders might have noticed that Apple Inc. (NASDAQ:AAPL) filed its yearly result this time last week. The early response was not positive, with shares down 5.4% to US$109 in the past week. Apple reported in line with analyst predictions, delivering revenues of US$275b and statutory earnings per share of US$3.28, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Apple after the latest results.
Following the latest results, Apple's 30 analysts are now forecasting revenues of US$314.2b in 2021. This would be a notable 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 18% to US$3.89. Before this earnings report, the analysts had been forecasting revenues of US$308.4b and earnings per share (EPS) of US$3.86 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$124, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Apple analyst has a price target of US$150 per share, while the most pessimistic values it at US$71.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Apple's past performance and to peers in the same industry. The analysts are definitely expecting Apple's growth to accelerate, with the forecast 14% growth ranking favourably alongside historical growth of 4.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.4% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Apple is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$124, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Apple. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Apple going out to 2025, and you can see them free on our platform here..
Even so, be aware that Apple is showing 1 warning sign in our investment analysis , you should know about...
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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