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Apple earnings preview: Analysts continue to raise targets
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Published May 01, 2023 07:23AM ET
Updated May 01, 2023 07:35AM ET
© Reuters. Apple (AAPL) earnings preview: Analysts continue to raise targets
Apple (NASDAQ:AAPL) is due to report later this week after the majority of other mega-cap peers mostly outperformed in the last 2 weeks.
The iPhone maker is expected to report results for the March quarter on Thursday, May 4, after market close. The Street expects Apple to report EPS of $1.43 on revenue of $92.9 billion.
Analysts are mostly positive on Apple into this week’s earnings report, although a 30.6% rally in stock year-to-date is likely to limit any big upside move.
Bank of America analysts raised the price target to $173 per share on the Neutral-rated stock as risk-reward remains balanced. They expect Apple to report “mostly inline quarter to slight beat.”
“We expect stronger iPhone demand to offset weakness in other hardware categories, and Services to benefit from subscription growth while App Store to remain weak,” the analysts said in a client note.
Wedbush analysts see Apple posting “at least in-line iPhone revenues.” The analysts are Outperform-rated on Apple stock with a $205 per share price target.
“We believe iPhone units based on a clear uptick in demand around the key China region this quarter could show some upside despite the shaky macro as higher ASPs and overall upgrade activity on iPhone Pro 14 carry the day for Cook & Co. With an App Store uptick this quarter we also believe Services revenue should be stable and combined should translate into headline numbers from Cupertino that should at least meet the Street's expectations,” they wrote.
Last week, Apple stock target was also raised at Barclays and Deutsche Bank. Barclays analysts, who hiked the target to $149 per share, expect Apple's March quarter to be in line as better iPhone revs offset weaker Macs and Services.
Barclays also forecasts a guide down for the June quarter "with revenue declining by LSD Y/Y." Overall, they argue that the Equal Weight-rated Apple stock valuation is “rich.”
"Along with the weaker consumer spending backdrop, we believe we are witnessing the catch-up from strong Covid performance across product categories. Service revenues have been decelerating as well. We see pressure to estimates and potentially PE multiple in 2023.”
Deutsche Bank analysts lifted the target to $170 per share and noted that investors appear to be "attracted by the company's quality of earnings and its strong balance sheet in an uncertain macro environment.”
Apple stock is down half a percent in premarket Monday.
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