Bernstein Worried About Apple iPhone Unit Growth
2022.10.18 10:44
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Bernstein Worried About Apple iPhone Unit Growth
Bernstein analysts released a research note Tuesday, assessing Apple’s (NASDAQ:) FY Q4.
The analysts, who have a Market Perform rating and a $170 price target on the stock, told investors that historically, Apple’s FY Q4 earnings results are not particularly important, but forward guidance/commentary is.
“We are above consensus for Q4 revenues ($90.3B vs $88.6B) and EPS ($1.31 vs $1.26). Apple’s Q4 results will in part be shaped by how much of a sequential supply chain benefit it enjoys (potentially up to $3B) and whether it restocks channel inventory. We forecast Services growth of 10%, but see potential downside due to App Store weakness,” the analysts wrote.
Bernstein expects Apple to continue to provide guidelines rather than guidance while “any commentary that points to at least high-single-digit YoY growth for FY Q1 would likely be viewed as positive.”
“That said, Apple’s qualitative commentary around the demand environment may ultimately shape investor sentiment more,” analysts added.
“We continue to worry about iPhone unit growth amid elongating replacement cycles following two strong years of sales – particularly in China,” analysts noted. “More broadly, we worry that AAPL may have been a Covid beneficiary, amid work/ learn from home and strong consumer spending, which could reverse, particularly as consumers’ spending priorities change and rising rates potentially pressure demand.”
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