Evercore ISI Removes Apple From Tactical Outperform List, Maintains Outperform and $330 Target
Evercore ISI analyst Amit Daryanani removed Apple (NASDAQ: AAPL) from the firm’s Tactical Outperform list following Q1 results, while maintaining an Outperform rating and $330.00 price target.
“We’re removing AAPL from our Tactical OP list following their Dec-qtr (Q1:FY26) earnings release yesterday after the market close.
AAPL reported strong upside to FQ1 street expectations, with revs/EPS of $143.8B/$2.84 ahead of street at $138.4B/$2.67.
Total revenues grew +15.7% y/y, led by iPhone growth of +23% y/y and Services growth of +13.9% y/y.
Gross margins for the quarter of 48.2% (+130ps y/y) came in above the high-end of management’s guide and beat street expectations.
Management added that supply constraints limited their ability to meet upside in demand and are expected to continue into next quarter.
Looking ahead, AAPL guided Mar-qtr revs up +13-16% y/y (vs. street at up ~10%), reflecting ongoing iPhone demand and continued DD Services growth, despite ongoing product supply constraints.
Notably, memory headwinds had a minimal impact on GMs in the quarter, though they are expected to have more of a negative impact in the Mar-qtr.
Key points from the EPS call were – 1) Growing Installed Base: Active iOS devices came in at 2.5B, up ~7% y/y suggesting that AAPL continues to expand its aggregate market share that should lay the foundation for eventual services monetization; 2) Gross Margins: GMs in Dec-qtr of 48.2% were 20bps ahead of the high-end of AAPL’s guide of 47-48% and grew ~130bps y/y.
Continued Services growth and minimal memory impact were key here.
While investors will focus on memory worries, we think there are offsets in H2 (mix, pricing, insourcing); 3) iPhone Demand: iPhone sales remained robust as demand for the iPhone 17 family continues to outpace supply (+23% y/y).
Notably, total China sales grew +38% y/y, driven by iPhone, with a record number of upgraders and DD growth on switchers; and 4) Services growth appears durable despite App Store concerns, growing +14% y/y, while services GMs came in at 76.5% (all-time high).
Net/net: We’re removing AAPL from our tactical outperform list following a strong beat-and-raise. We continue to view AAPL as one of our top picks for CY26 and maintain our OP rating and $330 target.”
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