Last week, you might have seen that Apple Inc. (NASDAQ:AAPL) released its full-year result to the market. 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. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Apple's 30 analysts is for revenues of US$314.2b in 2021, which would reflect a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 18% to US$3.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$308.4b and earnings per share (EPS) of US$3.86 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$124. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Apple analyst has a price target of US$150 per share, while the most pessimistic values it at US$71.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.4% per 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 important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..
And what about risks? Every company has them, and we've spotted 1 warning sign for Apple you should know about.
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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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