New Apple Watches
Apple posted stronger results than expected for the fourth quarter, but a second quarter in a row of strong growth for portable, impressed analysts looking for the tech giant to innovate beyond the iPhone.
"Wearables continue to grow. Many investors attributed 50% wearables growth in the June quarter to shorter lead time as demand captured the supply, but a second quarter in a row with 50% + [year over year] growth and the fact that Apple beats AirPods- Forecasts weekly indicate strong double-digit growth is sustainable, "Morgan Stanley analyst Katy Huberty wrote in a note to investors.
Morgan Stanley has an overweight rating of Apple's stock with a price target of $ 296.
Apple shares rose 1
And Huberty thinks Apple's portable device has room to run, as she thinks there are many iPhone owners who do not yet have an Apple Watch or AirPods. Her company expects Apple Watch revenues to increase by 24% in the 2020 financial year and AirPods revenue to grow 107% over the year.
"Considering 3 out of 4 Apple Watch customers are new to the device, expect a long growth path ahead," Huberty said.
Barclays analyst Tim Long, whose company has an equal weight rating and $ 236 price target on Apple, also highlighted the unit's growth. He said Apple's portable performance showed "positive trends for new products," and gave hope for innovation in Apple's hardware line to find new profits.
"New AirPods Pro probably one of the hottest Christmas presents as well as Apple Watch for the December quarter," Citi analyst Jim Suva said. Citi has an Apple Buy rating of $ 250.
– CNBC's Michael Bloom contributed to this report.