Apple (AAPL): Earnings Preview Drexel Hamilton

Drexel Hamilton analyst, Brian White, reiterated his Buy rating on shares of Apple (NASDAQ: AAPL) along with his pre-retrenchment price target of $185. Similar to the negative sentiment that engulfed Apple in late 2012 through the summer of 2013, the "gloom and doom" around Apple resurfaced in late 2015 and has picked up steam in 2016. Akin to the dog days of 2013, we believe this summer will prove to be a bottoming process for Apple's stock with our estimates pointing to a trough in the sales cycle, profit cycle and iPhone unit cycle in the June quarter.

For 3Q:FY16, the analyst is projecting that Apple will post $42.05 billion in revenues (Street is at $42.12 billion) and exceed $1.37 in EPS (Street is at $1.38). The sales estimate represents a 17% QoQ decline and much weaker than the five-year average QoQ decline of 9% over past June quarters. Apple's 3Q:FY16 outlook calls for sales of $41-43 billion and implies EPS of approximately $1.37 at the mid-point.

Apple is scheduled to report its 3Q:FY16 results with a conference call at 5:00pm ET. The dial-in number is 866-409-1555.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $98.66 yesterday.

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