Friday, February 3, 2023 12:01 pmNo Comments

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Apple on Thursday announced financial results for its fiscal 2023 first quarter ended December 31, 2022. The Company posted quarterly revenue of $117.2 billion, down 5 percent year over year, and quarterly EPS of $1.88. Apple missed on both counts as the analysts’ consensus (Refinitiv) called for revenue of $121.19 billion (vs. $123.9 billion in Q122) and EPS: $1.94 per share (vs. $2.10 in Q122). Morgan Stanley analysts say Apple remains a buy as growth in subscriptions and installed base are positive signs.

Rohan Goswami for CNBC:

Shorter-term macro issues don’t detract from the long-term value at Apple, Morgan Stanley analysts wrote in a Friday morning note that reiterated an overweight rating and a $175 price target.

“Taking a step back, it’s rare to see Apple miss and guide down in a quarter, but we believe the long-term positives from tonight’s report outweigh the short-term negatives,” Morgan Stanley’s Erik Woodring wrote. Apple’s Thursday night earnings report cited a strong dollar, continued production issues in China, and the broader macroeconomic environment as three reasons for Apple’s first year-over-year sales decline since 2019.

“On the third factor, I would say was just the challenging macroeconomic environment, and you’re hearing that from, I would think, everybody,” CEO Tim Cook told CNBC’s Steve Kovach.

But Morgan Stanley assesses those headwinds as transitory, noting both accelerated growth in iPhone installed base and a continued upward margin trajectory as longer-term upside which will ensure “the Apple flywheel keeps spinning.”

Morgan Stanley reiterated its Top Pick rating for Apple.

MacDailyNews Take: Analysts love Apple’s gross margin guidance for the March quarter in the range from 43.5% to 44.5%. Apple investors should, too.

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