Many of the big tech names are reporting September quarter earnings this week, but investors will have to wait until next week for the biggest big tech of them all to deliver its latest quarterly update.
Next Thursday (Nov 2), Apple (NASDAQ:AAPL) will dial in its fiscal fourth-quarter of 2023 results. In anticipation of the readout, Monness’ Brian White, a 5-star analyst ranked in the top 1% of Street experts, thinks investors should prepare for “headwinds across the portfolio.”
“In our view,” White said, “the combination of a downtrodden economy plagued by pernicious inflation, an emboldened Huawei, a new iPhone family with only incremental updates, and the maturity of the smartphone market, paint a bleak picture for iPhone trends.”
Nevertheless, the fact all four models that make up the iPhone 15 lineup became available on the same date (9/22) during the September quarter vs. last year when only three models in the iPhone 14 lineup saw a mid-September launch followed by the October 7 release of the iPhone 14 Plus, means White expects a year-over-year “revenue tailwind in 4Q:FY23 from the cadence of this year’s iPhone rollout.”
As such, White is forecasting iPhone revenue to climb by 2% from the same period a year ago to $43.41 billion, thereby improving on the 2% drop witnessed in 3QFY23 but lower than the 10% growth notched during the same quarter last year.
That said, while White applauds Apple’s “high-quality, aesthetically pleasing, industry-leading smartphones,” given a shaky macro backdrop, combined with a “mature market,” he sees an uninspiring iPhone 15 cycle in the offing. Additionally, for the quarter, White sees dwindling YoY sales for the Mac (down 23%), iPad (down 10%), somewhat countered by Services sales rising 15% to $22.06 billion.
White’s estimates, however, are above consensus. He is calling for FQ4 revenue of $90.50 billion, amounting to a modest 0.4% YoY increase and just higher than the Street at $89.25 billion. On the bottom line, White predicts EPS of $1.44 vs. the consensus estimate of $1.39.
Despite the expected headwinds, then, White’s overall take is positive as he keeps a Buy rating on the shares to go along with a $208 price target, suggesting shares will post 12-month growth of 21%. (To watch White’s track record, click here)
Where do other analysts stand on AAPL? Overall, 21 Buys and 9 Holds have been issued in the last three months. Therefore, AAPL gets a Moderate Buy consensus rating. Given the $205.30 average price target, shares could surge ~19% in the next year. (See Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
