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Investors Business Daily

Apple Stock Nears Buy Point After 'Top Gun'-Style June Quarter

Apple stock rose Friday after the consumer electronics giant delivered an upbeat June-quarter report. Plus, it expects sales growth to accelerate in the September quarter as supply chain issues ease.

The Cupertino, Calif.-based company late Thursday topped Wall Street's estimates for its fiscal third quarter ended June 25 thanks to better-than-expected iPhone sales and services revenue. Total sales rose 2% year over year to $83 billion while earnings per share dropped 8% to $1.20.

Apple didn't provide specific revenue guidance for its fiscal fourth quarter but said sales growth would accelerate on easing supply constraints. In the June quarter, Apple struggled with shortages of Mac computers and iPad tablets.

Apple's revenue is more impacted by supply constraints than macroeconomic worries, Evercore ISI analyst Amit Daryanani said in a note to clients. He reiterated his buy rating on Apple stock and raised his price target to 185 from 180.

Apple Stock In Consolidation Pattern

On the stock market today, Apple stock rose 3.3% to close at 162.51. With the move, Apple climbed above its 200-day moving average line, a positive sign.

Plus, its relative strength line carved a fresh high as Apple outperforms the S&P 500 index.

Apple stock is in a 30-week consolidation pattern with a buy point of 183.04, according to IBD MarketSmith charts. That buy point is 10 cents above the stock's all-time high 182.94, reached on Jan. 4, based on IBD trading guidelines.

Wedbush Securities analyst Daniel Ives said Chief Executive Tim Cook delivered in "'Top Gun: Maverick' fashion," alluding to the hit Tom Cruise action movie. Ives maintained his outperform rating on Apple stock with a price target of 200.

"We walk away from the conference call and June results incrementally more positive that Apple can navigate this economic storm with the demand and growth story well intact for the growth pillars of iPhones and Services front and center," Ives said in his note to clients.

Growth Despite Numerous Challenges

On a conference call with analysts, Cook said he is satisfied with Apple's performance in the June quarter.

"Overall, we are very happy with the results," Cook said. "And when you think about the number of challenges in the quarter, we feel really good about the growth that we put up for the quarter."

Piper Sandler analyst Harsh Kumar called Apple's June-quarter performance "impressive." He reiterated his overweight, or buy, rating on Apple stock with a price target of 195.

"Apple's strength lies in its brand loyalty as well as its tremendous installed base, both of which are helping offset the macro," Kumar said in a note.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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