Apple Inc (NASDAQ:AAPL) will likely highlight the performance of its iPhone 16 and upcoming product releases when the company reports fourth-quarter financial results after market close Thursday.
Earnings Estimates: Analysts expect the Cupertino, California-based company to report fourth-quarter revenue of $94.56 billion, up from $89.5 billion in last year’s fourth quarter, according to data from Benzinga Pro.
Apple has beaten analyst estimates for revenue in six straight quarters and nine of the last 10 quarters overall.
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Analysts expect the company to report fourth-quarter earnings per share of $1.53, up from $1.46 reported in last year’s fourth quarter. The company has beaten analyst estimates for earnings per share in six straight quarters and nine of the last 10 quarters overall.
What Analysts Are Saying: The iPhone 16 will be one of the key items analysts are watching in the earnings report and conference call.
“iPhone 16 demand has been relatively stable year-over-year and better-than-feared given more cautious data points around shorter lead-times relative to year-ago and production cuts,” Goldman Sachs analyst Michael Ng recently said.
Ng reiterated a Buy rating on Apple with a $275 price target recently.
The analyst said Apple’s push into artificial intelligence with Apple Intelligence could be a “long-term demand driver.”
Another area Ng will be watching closely in Apple’s report is the company’s Services segment, which could be underestimated by investors.
“Apple’s installed base growth, secular growth in services, and new product innovation should more than offset cyclical headwinds to product revenue, such as a reduced iPhone unit demand due to a lengthening replacement cycle and reduced consumer demand for the PC & tablet category.”
Lower lead times for the iPhone 16 could signal a lack of demand for the newest version of the popular Apple smartphone, Morgan Stanley analyst Erik Woodring recently said.
The analyst, who has an Overweight rating and $273 price target on Apple, said while the data for lead times was bad for the iPhone 16, it could be better than the previous iPhone 15.
Lower lead times could also be a factor of Apple being more proactive with its suppliers in keeping inventory in check to avoid supply constraints, Woodring said.
“We believe that better supply conditions are one of the contributing factors to why iPhone lead times are shorter this cycle than in recent cycles,” Woodring said.
Here are other recent analyst ratings on Apple and their price targets:
- KeyBanc: Downgraded from Sector-weight to Underweight with $200 price target
- Piper Sandler: Reiterated Neutral rating with $225 price target
- Bank of America: Reiterated Buy rating with $256 price target
- Barclays: Maintained Underweight rating with $186 price target
Key Items to Watch: All eyes will be on the iPhone 16 when Apple reports fourth-quarter results Thursday.
Other items that investors will be watching include Services, the initial rollout of Apple Intelligence and China.
- Services hit an all-time record for revenue in the third quarter but came in below Street estimates.
- Weakness in China for the third quarter contributed to shares seeing downward pressure after the earnings results.
- Apple’s recent AI product announcements could be highlighted in the results as future catalysts.
Price Action: Apple stock is down 1% to $230.38 on Wednesday versus a 52-week trading range of $164.08 to $237.49. Apple stock is up 24% year-to-date in 2024.
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