Evercore ISI Reiterates Outperform Rating on Apple Following App Store Data, $330 Price Target
Evercore ISI analyst Amit Daryanani reiterated an Outperform rating and $330.00 price target on Apple (NASDAQ: AAPL).
“January App Store revenues grew +7% y/y in the month, modestly accelerating from growth of +6% last month.
Gaming revenues posted a third consecutive month of year-over-year declines, with Jan. revenues down -3% (vs. -4% last month).
Weakness across the category was broader than last month, with notable revenue declines in China, Japan, the U.S. and South Korea. Notably, the year over-year compare was tough here, with Jan.
2025 revenues growing +9%, though moving forward, Gaming revs will see easier comps through the rest of H1:CY26.
Despite ongoing Gaming weakness, revs in the other five categories we track grew by double digits, led by Music (+21% y/y), followed by Other (+21% y/y), Photo & Video (+18% y/y), Social Networking (+11% y/y), and Entertainment (+10% y/y).
Gaming remains the largest category of App Store revenues at 45%, though excluding it from January data, remaining aggregate revenues would’ve grown +17% y/y. Looking at revenues by region, U.S.
App Store revs grew +3% y/y, while App Store revs in the second and third largest geos (China and Japan) declined -1% y/y each.
Worth pointing out here that year-over-year growth accelerated in China and Japan – +350bps and +260bps y/y, respectively.
Net/net: January App Store revs modestly improved by 1pt m/m, growing +7% in the month.
While Gaming remains an ongoing headwind to sales (due in part to tougher y/y compares), growth in the other major categories we track was strong, with remaining aggregate revs up +17% y/y.
In addition, AAPL continues to post strong Services revenue growth despite softer App Store data, with Dec-qtr growth of +14% y/y versus App Store data suggesting +6.5% growth in the quarter.
We expect AAPL to continue to benefit from faster growing areas (Apple Pay, iCloud, Licensing, etc.), helping to offset <10% growth in App Store revs. Maintain OP and $330 target.”
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