JP Morgan: Is There A Downside To Apple's Results?

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JP Morgan issued a report on Tuesday giving their key takeaways on Apple Inc. AAPL after the company reported Q2 2015 earnings. Due to strong iPhone demand, which included over 61 million units shipped to consumers, revenues beat estimates while iPad volumes declined for the fifth consecutive quarter.

Analysts at JP Morgan wrote, "iPhone units were up 40 percent year over year….with the prospects of the larger iPad getting pushed out, we expect declines on the iPad to continue...Apple Watch-off to a strong start but lack of hard numbers a dampener."

The analysts believe strong demand for the new Macbook will cause the volume of units sold to increase, especially as the product gains traction in markets such as China.

JP Morgan believes that the key catalyst for Apple going forward will be iPhone supply-chain growth and the Apple Watch, which has the power to revolutionize the watch industry. However, while Apple acknowledged that demand for the Apple Watch is greater than the supply, management did not provide statistics to back that statement up which could be a slight concern to investors. Nonetheless, research conducted by JP Morgan shows that the supply of the Apple Watch could reach two million per month by June and over three million per month by the end of Q3 2015.

Shares of Apple recently traded at $131.00, down 1.2 percent.

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Posted In: Analyst ColorAnalyst RatingsJP Morgan
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