Apple (NASDAQ:AAPL) will announce its Q4 financials after the market closes on October 27. Despite multiple revenue headwinds (including adverse currency movement and an economic slowdown), Wedbush analyst Daniel Ives expects Apple to meet the analysts’ revenue estimate for Q4.
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Ives believes Apple will be “able to hit the Street’s $89 billion top-line estimate with stronger ASPs [average selling prices] from iPhone 14 the hero of the day that could lead to a modest revenue upside.”
During the Q3 conference call, Apple’s management stated that the year-over-year revenue growth rate would improve in Q4 compared to Q3 (it recorded a 2% year-over-year growth in its top line). This guidance included 600 basis points of negative impact from currency headwinds.
Further, the analyst expects Apple to beat the margins and earnings estimates in Q4 because of tight expense management and a better price mix. Notably, Wall Street expects Apple to post earnings of $1.27 a share in Q4 compared to $1.24 in the prior year.
While Ives is bullish about Apple and expects the company to surpass the Street’s expectations, a higher-than-expected currency headwind, a weak economy, and inflationary pressure on consumer spending could take a toll on Apple’s financials and stock price.
Investors would do well to follow Ives, who has an average return of 17.32% success rate on his AAPL ratings. Check out his AAPL track record here:
What is the Price Target for Apple?
Apple stock’s average price target of $181.68 on TipRanks, implies 19.3% upside potential. Moreover, AAPL stock has 23 Buy, four Hold, and one Sell recommendations for a Strong Buy consensus rating.
It’s worth mentioning that retail investors holding portfolios on TipRanks have bought AAPL stock ahead of earnings. TipRanks’ data shows that 1.6% of these investors have bought Apple stock in one month. Moreover, AAPL stock carries an Outperform Smart Score of nine on 10.
Concluding Remarks
The weakening of the economy, currency headwinds, and pressure on consumer spending pose challenges for Apple. However, its solid product demand, growing services revenue, and cost control measures will likely support its revenue and earnings.
