With Apple’s earnings just two weeks away, analysts are reassessing their estimates for the June quarter and beyond. Although one analyst has raised his price target for Apple shares, he remains wary of the near-term outlook for iPhone sales, which contribute to over half of the company’s revenues.
BofA Global Research analyst Wamsi Mohan recently increased his price target on Apple shares to $210 from $190, while maintaining a Neutral rating on the stock. Mohan expressed concerns that iPhone sales for the fiscal year ending September 2023 may fall short of consensus estimates.
According to Mohan’s research note, the June quarter results, set to be reported on August 3, are expected to align closely with Street predictions. Mohan anticipates a revenue of $80.7 billion and earnings of $1.17 per share, slightly below the Street’s consensus forecast of $81.8 billion in revenue and earnings of $1.19 per share. He also mentioned that while Apple’s management has predicted a four-percentage-point headwind from currency, Mohan believes the actual impact will be less than two points.
However, Mohan expressed concerns about potential disappointment in fourth-quarter guidance. Based on his channel checks, he found that the launch of the iPhone 15 could be delayed by a few weeks, resulting in the next-generation phone making its debut in the December quarter. As a result, he now expects September quarter revenue to be $87.1 billion, significantly lower than the consensus estimate of $91.6 billion, even with a 2.5% tailwind from favorable foreign-exchange rates.
Mohan predicts that all Apple hardware categories will experience year-over-year sales declines in the June quarter. Considering the likely timing of the new iPhone launch and tougher comparisons for the Mac, he believes there is potential for further declines in product revenue in the September quarter. The analyst’s forecast for iPhone unit sales in the September quarter is 48 million, below the Street’s consensus forecast of 51 million.
Despite these concerns, Apple shares closed the day with a modest 0.7% gain, reaching $195.10, partly influenced by rumors of the company working on an AI chatbot.
