CUPERTINO, Calif., Oct. 22 – While Morgan Stanley (MS, Financial) remains bullish overall over the long-term, the investment bank notes that the near-term situation seems “challenging” for Apple (AAPL, Financial) as it releases its fiscal Q4 results on October 31. Driven by late-cycle momentum in the Apple iPhone 15, analyst Erik Woodring believes Apple to surpass forecasts for the September quarter. He did warn, though, that the business would steer December quarter profits and income below Street projections.
With an overweight rating and a $273 price target on Apple, Woodring expects sales in the December quarter to be at $125 billion (representing 4.5% YOY growth) and an EPS of $2.36, 1% to 2% below consensus projections. Although he has not seen any reduction in iPhone manufacturing, Woodring said demand remains "mixed."
"Historically, amid mixed demand, iPhone builds are cut by 3 million units, on average, in the December quarter, exactly what we are embedding in our updated forecast," Woodring said. He also mentioned that Apple trading at 32 times the company's FY25 EPS estimate, almost at around all-time highs, may have a tactically more difficult setup moving into earnings. Based on $94.23 billion in revenue, analysts project Apple to report $1.55 per share in earnings for the next quarter.
