As Apple Inc. (NASDAQ:AAPL)’s Worldwide Developers’ Conference goes on, analysts at several firms are clamoring for more. There’s a common theme in this week’s reports from the three firms mentioned in this report. No surprises. Nothing new. No substance yet. And so on. And so forth. And they echo the comments from Jefferies analyst Peter Misek.
But in spite of these common themes, two firms remain upbeat on Apple, while the third is rather ho-hum about the company.
Goldman Sachs’ Takeaways On Apple At WWDC
Goldman Sachs analysts Bill Shope, Elizabeth Borbolla, Cristina Colon and Justin Price said in their report that they were expecting iOS 7 updates and enhancements to Apple Inc. (NASDAQ:AAPL)’s iOS services and key attributes. In terms of the iOS updates, they were positively surprised by the enhancements to the user interface. They saw the enhancements as better than they expected.
In terms of service updates, they were “encouraged” by the announcement regarding iTunes Radio, although they felt that the iCloud and Siri enhancements were “somewhat underwhelming.” Nonetheless, they see positive earnings momentum from Apple Inc. (NASDAQ:AAPL)’s next iOS hardware launches as a major step in the recovery of the company’s stock. They maintained their buy rating and $500 per share price target on Apple Inc. (NASDAQ:AAPL).
Morgan Stanley’s Takeaways On Apple
Analyst Katy Huberty and her team at Morgan Stanley also said that WWDC was as expected, and they agree that iOS 7 was a positive surprise. According to Huberty, developers gave iOS 7 positive feedback, and the fall release that was promised by Apple Inc. (NASDAQ:AAPL) is consistent with the company’s last earnings call and also last year’s iPhone 5 and iOS 6 launch. As a result, they’re leaving their expectations for the launch of the next iPhone unchanged.
Huberty notes that 93 percent of iOS users are on the latest version of the operating system, while only a third of Android users are, which makes it easier for developers to roll out updates more quickly to a larger customer base.
She said the announcement about iTunes Radio was also as expected, and their checks indicate that adoption rates for iCloud, GameCenter and other iOS services are accelerating based on information which was just released this week. Huberty is still calling for a mobile payments service and said that historically, Apple Inc. (NASDAQ:AAPL) saves its new features for hardware refreshes.
Morgan Stanley kept its overweight rating and $540 per share price target on Apple.
Nomura’s Takeaways From Apple’s WWDC
Nomura analysts Stuart Jeffrey and Woo Jin Ho read a little bit more into the comments made by Apple Inc. (NASDAQ:AAPL) executives at WWDC. They said the comments about focus and perfection may mean that if the company does release a mid-range iPhone, it will be expensive and that a 5-inch iPhone might take some time to develop and bring to market. They also said it appears as if Apple Inc. (NASDAQ:AAPL) “is unlikely to ever be reactive to changing market trends.”
The analysts said at this point the changes to iOS are only “skin-deep” and that the company won’t announce any major new features until it launches new products, which could be in the fall. They also said they don’t believe iTunes Radio matches the capabilities of competitors like Spotify or Google Play Music All Access.
Nomura analysts see the company’s next catalysts to be an August or September launch of the iPhone 5S and a mid-range iPhone. They remain neutral on shares of Apple Inc. (NASDAQ:AAPL) and have kept their $420 per share price target on the stock.
