After seeing most of its big tech brethren dial in their quarterly reports, it’s almost time for the big tech name to step up and deliver its latest financial statement. Come the close of Thursday’s (Nov 2) trading, Apple (NASDAQ:AAPL) will announce results for the fiscal fourth quarter of 2023 (September quarter).
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Looking ahead to the readout, Goldman Sachs analyst Michael Ng is expecting “relatively in-line results” for F4Q23, calling for revenue of $88.9 billion, slightly below consensus at $89.3 billion and EPS of $1.39, the same as the Street’s forecast. “We’re encouraged by the acceleration in Services revenue growth driven by a recovery in app spending, as well as continued growth in the iPhone installed base and increasing hardware attach per user,” says the analyst.
Driven by a shift in the product mix towards premium models – which includes the higher starting price of the iPhone 15 Pro Max this year, as there is no 128GB version available – iPhone revenue growth should see the benefit of “increased price/mix.” Furthermore, the lack of a new, low-cost iPhone SE in F2023 is expected to help make up for the decline in the number of units sold.
Looking forward to F1Q24 (December quarter), Ng is anticipating similar growth in iPhone and Services revenue as in F4Q23 (with a slight improvement for the former), and accelerating revenue growth in Mac and iPad. That should result in revenue of $121.9 billion, although the figure is a bit below the Street at 123.7 billion. However, reflecting above consensus gross margins of 44.2% (compared to the Street’s 43.6%) and opex of $14.4 billion (consensus has $14.9 billion), Ng forecasts EPS of $2.12, above consensus calls for $2.10.
The upshot of all the above is that Ng keeps a Buy rating on AAPL shares backed by a $213 price target. The implication for investors? Upside of 25% from current levels. (Watch Ng’s track record)
Most analysts have a similar take; based on a mix of 22 Buys vs. 9 Holds, the Street has a Moderate Buy consensus rating on Apple shares. Going by the $204.95 average target, a year from now, shares will be changing hands for ~20 premium. (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.
