BofA Doesn't See Much Upside For Apple Heading Into Earnings

Apple Inc. AAPL is scheduled to report earnings on Thursday afternoon. The company is unlikely to announce its September-quarter results ahead of estimates, given the delayed iPhone 12 launch, according to BofA Securities.

The Apple Analyst: Wamsi Mohan maintained a Neutral rating for Apple with a price target of $140.

The Apple Thesis: The later launch of the iPhone 12 creates twin headwinds for the company – one in terms of lower units of the new phone and lower ASPs (average selling prices) due to the mix having more units of the older models, Mohan said.

See Also: Apple Q4 Earnings Preview: Analysts Expect Muted Quarter Ahead Of iPhone 12 Strength

He expects iPhone revenues to have declined by 25% year-on-year and by 5% sequentially in the quarter and for overall revenues and earnings to come in at $62.1 billion and 63 cents per share, respectively, short of the consensus estimates of $63.8 billion and 70 cents per share.

“We model services growth of 13% y/y for Sep quarter but given the strength in the app store, there could be modestly higher growth in the qtr (~14-15%), especially if licensing trends (Google rev share) drives a reacceleration,” the analyst wrote in a note. “While weaker Sep qtr results might be less consequential, it remains unclear if Apple will guide the Dec qtr with a wider range or not at all."

AAPL Price Action: Shares of Apple closed Monday at $115.05.