Most of the Big Tech lineup has ramped up its efforts to request their latest earnings reports over the past two weeks, and it's almost time Apple (NASDAQ:AAPL) To grab the microphone. The company will deliver its latest quarterly statement as soon as trading stops on Thursday, with print arriving at a somewhat difficult time.
Apple is facing pressure in the Chinese market as iPhone sales are expected to be weaker compared to the same period last year, leading to a slight decline in revenue. Competition from Huawei and a less exciting upgrade cycle for the iPhone 15 has hit Apple hard in this key area.
As such, Wedbush analyst Daniel Ives expects the Street will try to “gauge just how weak the Chinese numbers are.” For sentiment to get a boost, much will depend on CEO Tim Cook's comment on the conference call. While Ives doesn't expect “any fireworks” for iPhone unit growth in China for the June quarter outlook (“the whispering ghost” is iPhone revenue of about $35 billion and total revenue of about $80 billion), he expects “cautious optimism” in the long term. “Expectations” regarding China.
The good news is that the next iPhone version is coming soon and it should be a much better course than the current one. This is because the next model will be an “AI-driven” iPhone 16 that should help the company “return to growth again in China with tailwinds in FY25.”
So, for Ives, it's now all about seeing the forest through the trees. Once Apple navigates the bumpy terrain over the next one or two quarters, things look brighter on the other side. Therein lies “easier installations, an AI announcement at WWDC, a stronger upgrade cycle for the iPhone 16, and the opportunity to monetize the golden base installed in Cupertino.”
“Although it will take some patience to overcome this Chinese weakness, we believe Cook & Co is sowing the seeds of Apple's growth transformation in the field.”
To that end, Ives maintained an Outperform (i.e. Buy) rating on Apple stock along with a $250 price target. Implications for investors? An increase of approximately 48% from current levels. (To watch Ives' record, click here)
The Street's average target is a more modest $200.37, yet still suggests shares will rise 18% in the coming months. In terms of rating, based on 18 Buys, 11 Holds and 2 Sells, the analyst consensus rates the stock as a Moderate Buy. (be seen Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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