On Friday, Citi analysts adjusted their outlook on Apple Inc. (NASDAQ:AAPL) shares, reducing the price target from $245.00 to $240.00, yet affirming a Buy rating on the stock. The revision follows Apple’s quarterly report, which revealed a modest earnings beat and stable sales figures. With a current market capitalization of $3.2 trillion, InvestingPro analysis indicates Apple is trading above its Fair Value, though the stock maintains a "GOOD" overall financial health score.
Apple’s March quarter earnings surpassed expectations by three cents, driven by a 2% year-over-year increase in iPhone sales, services matching projections with a 12% year-over-year rise, and a gross margin of 47.1%. The company’s robust profitability is reflected in its impressive 46.5% gross profit margin and 27.6% return on assets over the last twelve months. Sales in Greater China showed signs of recovery, with a 2% year-over-year decline, an improvement from a 11% drop in the previous quarter, largely attributed to iPhone sales bolstered by subsidies in China.
The company’s guidance for the June quarter anticipates low single-digit to mid-single-digit year-over-year total sales growth, which is slightly below the Street’s estimate of around 4%, factoring in a lower 46% gross margin percentage due to a $900 million impact from tariffs. This guidance suggests earnings per share could be approximately four cents below Street expectations.
Despite the headwinds, Apple announced a 4% increase in its dividend and authorized an additional $100 billion share repurchase program. According to InvestingPro, the company has maintained dividend payments for 14 consecutive years, with a current dividend yield of 0.47%. The aggressive share buyback program aligns with management’s historical approach to capital return. Citi’s analysts have adjusted their earnings per share projections for fiscal years 2025, 2026, and 2027, decreasing them by seven cents, five cents, and eleven cents, respectively, due to the tariff-related impacts.
The analysts concluded by emphasizing that Apple’s fundamentals remain sound, and the company has delivered satisfactory results and guidance amid challenging tariff conditions. They maintain a Buy rating on the stock, highlighting its defensive appeal based on price to free cash flow and return on invested capital when compared to its peers. With an Altman Z-Score of 9.2 indicating strong financial stability and seven analysts recently revising earnings estimates upward, Apple continues to demonstrate resilience. Discover more detailed insights and 12 additional ProTips about Apple’s performance through InvestingPro’s comprehensive research report.
In other recent news, Apple Inc. reported its financial results for the first quarter of 2025, showcasing a strong performance by exceeding earnings and revenue forecasts. The company achieved an earnings per share (EPS) of $1.65, surpassing the forecast of $1.61, and reported a total revenue of $95.36 billion, exceeding the anticipated $94.22 billion. Apple’s services revenue reached an all-time high of $26.6 billion, reflecting robust growth in this segment. Despite these positive financial results, Apple’s stock experienced a decline in after-hours trading. The company also announced significant investment plans in the U.S., aiming to spend $500 billion over the next four years, including the opening of a new factory in Texas. Additionally, Apple launched the iPhone 16e and a new MacBook Air, further expanding its product lineup. Looking ahead, Apple expects revenue growth in the low to mid-single digits for the June quarter.
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