Apple (AAPL) has been hit with a $12 million fine in Russia for allegedly abusing its dominant market position in the mobile application market. According to Reuters, the Federal Antimonopoly Service (FAS) maintains that the distribution of apps through the iOS operating system gives the tech giant’s products an unfair advantage. Reuters reports that FAS imposed a turnover fine of $12 million on Apple for violating Russia's anti-monopoly legislation. However, the tech giant has refuted the claims, stating it will appeal the FAS ruling. Last year, the FAS determined that the US company abused its dominant market position by rejecting third-party apps. According to Reuters, the agency directed the iPhone maker to remove all provisions that gave it the right to reject third-party apps in its App Store. Reuters reports that the directive followed a complaint by cybersecurity firm Kaspersky Lab, whose new version of the Safe Kids application was rejected by Apple. "We worked with Kaspersky to get their app in compliance with rules that were put in place to protect children," Apple said in a statement. "They now have 13 apps on the App Store and we have processed hundreds of updates for them". Apple joins a growing number of western companies whose operations in Russia have come under scrutiny in recent months. Twitter (TWTR) is one of the companies that have faced off with regulators for allegedly slowing down on deleting content Moscow deemed illegal. (See Apple stock analysis on TipRanks). Oppenheimer analyst Martin Yang believes Apple will continue to show stronger resistance to competition with its expanding hardware and software ecosystem. The remarks come on the back of the company reporting impressive 2Q 2021 results that affirm growth in the core business. “We believe longer term, Apple will leverage its tech superiority (Apple Silicon) and vertical integration (chip to cloud service) to distance itself further from competitors in mature as well as emerging market verticals. While near-term growth rates will start to moderate following F2Q21, we are more comfortable in Apple's longterm positioning,” Yang wrote in a research note to investors. The analyst has since reiterated a Buy rating on the stock with a $160 price target implying 19.87% upside potential to current levels. Consensus among Wall Street analysts is a Strong Buy based on 19 Buys, 5 Holds, and 1 Sell. The average analyst price target of $159.96 implies 19.84% upside potential to current levels. AAPL scores a 9 out of 10 on TipRanks’ Smart Score rating system, implying it is likely to outperform market expectations. Related News: Amazon’s Tussle With Microsoft Over Jedi Contract Continues - Report SPX Flow To Snap Up Philadelphia Mixing Solutions For $65M Verizon Considers Selling Its Media Division For $5B – Report
There has been grumbling in some corners of the Street, that much better-than-expected quarterly results are not being reflected in some of the stocks’ performance this earnings season. Apple (AAPL) investors will feel hard done by if the market does not ultimately recognize the tech giant’s latest quarterly achievements.
Apple blew the forecasts out of the water in Q2F21, in a display which Canaccord Genuity’s Michael Walkley calls “remarkable.”
Revenue increased year-over-year by 53.7% to reach $89.6 billion, in the process coming in $12.31 billion above the Street’s call. GAAP EPS trounced the estimates – at $1.40 beating consensus by $0.42.
“Demand for the company’s products exceeded both street and our expectations, particularly for the new iPhones,” Walkley said. “We think this demonstrates Apple’s sticky customer base and the company’s strong positioning with remote work/learning trends.”
As Walkley notes, iPhone sales were particularly strong - at $47.94 billion, the figure easily beat the $40.80 billion consensus estimate.
The Street excepted $6.90 billion of Mac revenue – Apple generated $9.1 billion. Same with the iPad, which clocked in sales of $7.8 billion vs. the $5.79 billion forecast.
Walkley says demand for the new Mac products boasting M1 chips was “strong given increased remote learning/work,” and notes that customer satisfaction “remains industry leading.”
Not to be outdone, the Services segment notched “another all-time record” with revenue increasing by 27% year-over-year to $16.9 billion. Wall Street expected $15.53 billion.
While there was no specific guidance, management did suggest “accelerating YoY growth trends with double digit YoY revenue growth in the June quarter.”
That said, given the iPhone was “still ramping” in March after last year’s delayed launch and supply constraints are hitting revenue streams to the tune of $3 to $4 billion, Apple anticipates the quarter-over-quarter revenue decline from the March to June quarter to be “more pronounced” than in previous years.
Nevertheless, the “robust Q2/F21 results, stronger gross margin trends, and management’s commentary,” are enough for Walkley to boost the price target from $155 to $165, suggesting room for 22% upside over the coming months. The 5-star analyst’s rating stays a Buy. (To watch Walkley’s track record, click here)
Turning now to the rest of the Street, where Apple boasts a Strong Buy consensus rating based on 20 Buys vs. 4 Holds and 1 Sell. At $159.3, the average price target implies shares will rise by 19% over the next 12 months. (See Apple stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.