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The giant has spoken and life is good: Apple (AAPL: $320, up $9 yesterday and up 1-2% overnight) has shifted its sales mix and is once again growing faster than we expected or even hoped.  Equity Residential (EQR: $82, flat this week) also did well.

 

While we probably haven't heard the last of the outbreak reports, these numbers are good enough to keep Wall Street looking to the upside . . . at least domestically, where most BMR stocks are focused. Our universe has now recovered all ground lost Monday and today looks good. After all, Apple brought the numbers it needed: almost $92 billion in revenue, up 10% from last year and blowing through the top end of CEO Tim Cook's forecast. It's a wonder he didn't revise his guidance during the quarter: he knew business was better than he led us to believe.

 

We could quibble about the details but iPhone sales were strong, rebounding 7% above last year's level while Services holds its 17% growth track. Accessories (including headphones but really all about the Apple Watch) is booming. Momentum is back on the company's side. And he has 1.5 BILLION consumers in his walled garden to tempt with additional products and services now.

 

Profit of $4.99 per share beat our target and shows healthy 19% growth, once again thanks to their buying back 7% of all Apple stock over the past year. They can keep doing it for a long time, with a steady $205 billion in cash on the balance sheet ready to deploy. As for the future, revenue guidance for the current quarter is tracking 5% above what we expected.

 

Equity Residential, meanwhile, is unlikely to move the market on its own, but shareholders should be satisfied with $0.91 per share in Funds From Operations. That's more than enough to keep the 57 cent dividend flowing. We expect a big distribution hike ahead, especially now that management has confirmed that they're going to bring in at least $3.70 per share over the coming year.

 

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Earnings Preview: Facebook (FB: $218, flat)

Earnings Date: Wednesday, 5:00 PM ET 

Expectations: 4Q19
Revenue: $20.9 billion
Net Profit: $7.2 billion
EPS: $2.52

 

Year Ago Quarter Results
Revenue: $16.9 billion

Net Profit: $6.9 billion
EPS: $2.38

 

Implied Revenue Growth: 24%
Implied EPS Growth: 6%

 

Target: $250, hereby raised from $220
Sell Price: $206, up from $177
Date Added: May 21, 2019
BMR Performance: 18%

 

Key Things To Watch For in the Quarter

 

Remember when Facebook was sacrificing profit in order to build massive internal monitoring systems and to fend off regulatory oversight? The heavy lifting is over and once again the money is rolling in. This is a simple story now. With the election coming and Twitter refusing all political ads, 24% revenue growth this quarter is only a taste of what we'll see later this year.

 

All Mark Zuckerberg needs to do is keep monetizing the other Facebook platforms (Instagram and WhatsApp) while the main site maintains momentum. The expensive big build is over. Time to let the margins expand and translate a tidal wave of revenue into profit.

 

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Earnings Preview: PayPal (PYPL: $117, flat)

Earnings Date: Wednesday, 5:00 p.m. ET

Expectations: 4Q19
Revenue: $4.9 billion

Net Profit: $985 million
EPS: $0.83

 

Year Ago Quarter Results
Revenue: $4.2 billion

Net Profit: $825 million
EPS: $0.69

 

Implied Revenue Growth: 17%
Implied EPS Growth: 20%

 

Target: $140, up from $125
Sell Price: We would not sell PayPal.
Date Added: January 21, 2016
BMR Performance: 273%

 

Key Things To Watch For in the Quarter

 

The growth machine remains on track. As long as PayPal can bolt enough new services onto its core Payment platform to keep both top and bottom line moving up about 20% a year, the stock has what it takes to rise above the market froth. This one is a keeper.

 

As always, we're watching transaction metrics on Venmo, the Millennial-oriented phone app. That's where the real growth has been lately, and as yet adoption is a lot closer to the ground floor than hitting any kind of long-term plateau. Consumers who opt in now have a very good chance of staying for the rest of their lives . . . think of credit cards in their infancy. PayPal has that kind of opportunity to lock down Millennial spending patterns for decades to come.

 

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Earnings Preview: Microsoft (MSFT: $165, flat)

Earnings Date: Wednesday, 5:00 p.m. ET

Expectations: 4Q19
Revenue: $35.6 billion

Net Profit: $10.1 billion
EPS: $1.32

 

Year Ago Quarter Results
Revenue: $32.5 billion

Net Profit: $8.6 billion
EPS: $1.10

 

Implied Revenue Growth: 10%
Implied EPS Growth: 20%

 

Target: $166 (nearly there!)
Sell Price: We would not sell Microsoft.
Date Added: January 28, 2016
BMR Performance: 218%

 

Key Things To Watch For in the Quarter

 

We've heard from one $1 trillion titan. Now it's time to clear the decks for Mighty Microsoft. A miss is vanishingly unlikely . . . the company has beaten its own targets every quarter for the last eight years, and we know that if our own expectations get too far out of line management will gently remind us where to set the bar. 

 

While any of the company's sprawling business lines can and will contribute to the growth we're looking for tonight, the big numbers will probably be all about the Azure Cloud Computing platform. Microsoft has started to capture substantial market share here from Amazon and Alphabet. We suspect that story is only beginning now. And once enterprise customers move to the Microsoft Cloud, they'll buy other services. A toe in the door turns into big money, which in turn gives a $1 trillion giant plenty of room to keep expanding 10% a year. Our Target is already in sight. We're eager to raise.