J.P. Morgan gives Apple forecast a modest haircut

"We are trimming our earnings forecasts for Apple, led by a modest haircut to our revenue growth estimates for iPhone." -- Analyst Samik Chatterjee

From a note to clients that landed on my desktop Thursday:

We have recently taken a more cautious view on the consumer spending outlook, including moderating our growth forecasts for the smartphone market, which is already limiting the upside we had expected from the launch of the iPhone SE3 and will likely limit the magnitude of upside to iPhone 13 as well as App Store revenue in Services.

Thus, we are trimming our earnings forecasts for Apple, led by a modest haircut to our revenue growth estimates for iPhone (primarily iPhone SE) and Services, although the overall reduction in estimates is fairly modest given the resilience of high-end smartphones, tablets and laptops to the broader slowdown in consumer spending.

The reduction in estimates from what were above consensus (and bullish) expectations for iPhone revenue growth is now bringing us largely in line with consensus forecasts for FY22. However, we remain above consensus expectations for FY23 and FY24, led by our forecasts for better than expected growth in Products as well as margin and earnings trajectory on the back of robust growth in Services. Our positive view on the shares long term leads us to maintain our...

Overweight rating and Dec-22 price target of $210.

My take: Despite the trimmed forecast, Chatterjee's price target remains only $5 below BofA's Street high.

One Comment

  1. Steven Philips said:
    Oh no! There goes the stock price!

    Is that (Dec.22) the first time I’ve seen a stated date for a price target? Nice!

    2
    April 8, 2022

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