Apple stock could benefit from higher fiscal fourth-quarter earnings

Investors will pay attention to Apple(AAPL) September quarter earnings and guidance amid signs of slowing consumer spending. Apple stock tumbled ahead of next week’s report.


Apple plans to announce its fiscal fourth quarter results after the market closes on Thursday. Analysts polled by FactSet are predicting Apple earnings of $1.27 per share on sales of $88.7 billion. This would translate to year-over-year growth of 2% in profits and 6% in sales.

For the December quarter, Wall Street forecast Apple earnings of $2.11 a share, up a penny from a year earlier, on sales of $126.6 billion, up 2%.

A key area for investors will be the performance of Apple’s latest smartphones, the iPhone 14 series. Supply chain and retail checks indicate strong sales of the more expensive Pro models offset by average sales of the regular patterns, according to analysts.

Apple Stock Might Get an iPhone 14 Facelift

“We expect the launch of this year’s iPhone 14 to add juice to fiscal fourth-quarter revenue,” Monness Crespi Hardt analyst Brian White said in a note to clients on Friday. However, he noted that “demand for new high-end iPhones and standard models seems more bifurcated this cycle.”

Apple started selling the iPhone 14 series on September 16 after a week of pre-orders.

White views Apple stock as a buy with a 12-month price target of 174.

In afternoon trading in the stock market today, Apple stock rose 1.7% to 145.86.

Sales of high-end smartphones A bright spot

Cowen analyst Krish Sankar said he saw growing risks for iPhone sales through the end of the year.

“High-end smartphones are one of the few areas of the tech landscape that has yet to see a correction in demand, although we believe this divergence may end in the coming quarters,” Sankar said in a note to customers on Friday. He believes Apple shares are outperforming with a price target of 200.

In addition to resilient iPhone sales, Apple should benefit from an improved supply of Mac computers and iPads in the September quarter, Barclays analyst Tim Long said in a note on Thursday. . However, Apple’s services business, particularly the App Store, appears to be weakening, he said.

Longs price Apple shares as equal or neutral weight, with a price target of 155.

Apple’s outlook hardens after the December quarter, Long said. The company faces a series of risks ahead. They include a potential decline in consumer spending and the risk of government regulatory action against Apple’s App Store and other services.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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