Apple Still Fairly Valued, say Analysts

Apple's second-quarter sales were $58 billion, down 5% year on year primarily due to iPhone weakness, but there are signs of improvement in China

Abhinav Davuluri 1 May, 2019 | 11:33AM

Apple campus, Silicon Valley

Apple (AAPL) reported fiscal second-quarter results at the high-end of its guidance, owing to continued growth in services as well as stabilisation in its iPhone business. CEO Tim Cook highlighted improvement in Greater China, thanks to recent pricing actions, trade-in and financing programmes, stimulus efforts by the Chinese government, and improved trade dialogue between the United States and China. Additionally, Cook noted iPhone declines were considerably smaller during the final weeks of the March quarter, which is a reassuring trend.

Meanwhile, the services segment delivered another impressive quarter, with App Store, Apple Music, cloud services, and App Store search ad businesses all recording all-time levels. Combined with a growing active installed base, our narrow moat rating stemming from switching costs remains comfortably intact, particularly as Apple customer satisfaction and loyalty continues to be healthy. We are maintaining our $200 fair value estimate and we think shares are fairly valued at current levels. 

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Apple Inc116.59 USD0.48

About Author

Abhinav Davuluri  is a Senior Equity Analyst for Morningstar

 

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies