Apple Inc AAPL reported better-than-expected earnings for the second quarter of fiscal year 2023. The stock is up nearly 5% during Friday’s intraday session, and several analysts updated their outlooks on the company following the earnings print.
By The Numbers: The company’s earnings per share came in at $1.52, beating the consensus estimate of $1.43 per share, while revenue totaled $94.8 billion, compared to analysts’ forecast of $92.96 billion.
Despite a 3% year-over-year decline in revenue, Apple CEO Tim Cook and CFO Luca Maestri expressed satisfaction with the company’s performance, noting that iPhone sales were strong in emerging markets including India, Indonesia, Turkey and the UAE.
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The Services segment revenue also hit a record high, although it grew at a slower rate of 5% year-over-year in the quarter. Several analysts weighed in on Apple’s earnings, offering their opinions on the stock’s outlook.
The BofA Analyst: Wamsi Mohan reiterated his Neutral rating on Apple and set a price target of $176.
Mohan praised the company’s execution and iPhone sales growth, though he expressed concerns about the lack of a major catalyst to drive higher demand, a potential iPhone mix reversion and weaker Services growth in the near term.
The Oppenheimer Analyst: Martin Yang provided an overview of Apple’s supply chain derivatives, noting that the company’s iPhone sales growth was a positive sign for suppliers including Qualcomm Inc QCOM, Qorvo Inc QRVO, Broadcom Inc AVGO, and Cirrus Logic, Inc. CRUS.
He added that Apple’s revenue mix was not as strong for its Mac and iPad segments.
The Raymond James Analyst: Srini Pajjuri reiterated his Outperform rating on the stock and raised his price target from $170 to $180.
Pajjuri cited Apple’s solid earnings results despite a weak macro environment and foreign exchange headwinds, as well as the potential for relative stability in the company’s revenue growth due to share gains in emerging markets and China reopening.
The KeyBanc Analyst: Brandon Nispel maintained an Overweight rating on Apple and raised his price target to $180.
Nispel highlighted the strong iPhone sales growth in emerging markets and the company’s ability to weather macroeconomic headwinds. He noted Apple’s revenue guidance was below consensus but in line with buy-side expectations and that the company’s cost controls provided reasons to be optimistic.
The Needham Capital Markets Analyst: Needham raised its price target on Apple to $195 and maintained its Buy rating.
The firm highlighted Apple’s installed base of more than 2 billion active devices, which drove nearly 2% year-over-year revenue growth and $28.6 billion of operating cash flow in the second quarter.
Needham saw Apple as a safe investment option for investors amid an uncertain macro and consumer demand landscape.
Apple’s second-quarter revenues were $94.8 billion, down 3% year-over-year but 3% above the firm’s estimate. The company’s services revenue reached an all-time high at $20.9 billion, up 5% year-over-year, while products revenue was $73.9 billion, down 5% year-over-year due to lower Mac and iPad revenue.
The Bernstein Analyst: Toni Sacconaghi said Apple’s second-quarter earnings were largely as expected. He noted the company’s revenue growth was strong in emerging markets but relatively weak in the U.S. and the Americas.
Apple’s third-quarter revenue guidance appears conservative, according to Sacconaghi, who said the below-seasonal growth was due to unusual iPhone channel inventory replenishment in the second quarter and iPhone push-out from the first quarter into the second quarter, rather than an indication of slowing demand.
While Sacconaghi expected modest downward revisions from consensus to FY23 estimates, he believed double-digit services growth was achievable in the next few years, despite more muted growth for advertising and the App Store.
Price action: Shares of Apple are trading 4.85% higher to $173.84, according to Benzinga Pro.
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