Apple Inc. (NASDAQ:AAPL) will release its next earnings report toward the end of the month, and Deutsche Bank analysts see a few possible catalysts in that report. They continue to see the company’s shares as attractive, particularly in the wake of the iPhone launch and leading up to additional new products.
Apple’s EPS, gross margins could boost shares
Analysts Chris Whitmore and Joakim Mahlberg maintain their Buy rating and $575 per share price target on Apple Inc. (NASDAQ:AAPL) heading into the company’s next earnings report. They note that the company already updated guidance for its September quarter after better than expected iPhone sales during launch weekend. As a result, they see this next report as being more about guidance and “color on the supply chain” as Apple Inc. (NASDAQ:AAPL) ramps up the iPhone 5S.
The analysts said Apple Inc. (NASDAQ:AAPL)’s gross margin guidance in particular could be a positive catalyst for its stock. They suspect that the iPhone 5S and 5C have higher margins than the iPhone 5 had at this time last year. They’re expecting gross margin guidance for the December quarter to be flat to up year over year. They’re estimating 38.5 percent, compared to 38.6 percent last year. They believe better gross margins will “help defuse the bear case” which revolves around Apple Inc. (NASDAQ:AAPL)’s margins being in a downward spiral.
They also expect to see a greater mix of iPhone sales and better average selling prices because of a stronger iPhone 5S mix within Apple Inc. (NASDAQ:AAPL)’s iPhone sales.
Apple’s product story expected to “remain robust”
The analysts note that Apple Inc. (NASDAQ:AAPL) is expected to unveil refreshed iPads and iPad Minis at its scheduled Oct. 22 event. They believe they will add 64-bit support, a fingerprint sensor, and of course, iOS 7, to the tablets. They suggest that more enterprise customers will pick up iPads over the next few years because of the greater security and 64-bit support.
In addition to new iPads, they’re also expecting to see a new Mac Pro, MacBook Pro and Mavericks to be launched sometime in October, as well as a deal with China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:0941) in November. They also point to data from Apple Inc. (NASDAQ:AAPL)’s supply chain which suggests a 5-inch iPhone launch next summer. They believe this will result in share gains for Apple Inc. (NASDAQ:AAPL) against Android next year.