Apple Q2 Earnings: 3 Things Investors Should Watch For

Apple, Inc. AAPL is expected to report its fiscal second-quarter earnings on April 28 after the market close. One analyst has listed three important factors Apple investors should be watching in the Apple earnings report.

The Analyst: Bank of America analyst Wamsi Mohan reiterated his Buy rating and $215 price target for Apple.

The Thesis: Mohan said Apple's iPhone sales, buybacks and dividends will be the three key elements of this week's report.

Mohan is projecting fiscal second-quarter iPhone unit sales of 56 million, slightly below consensus analyst estimates of 57 million.

In addition, he expects Apple to authorize a new buyback program of at least $70 billion and raise its 0.5% dividend by 5%.

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Mohan is also calling for Q2 adjusted EPS of $1.36 on revenue of $92 billion. Both numbers are below consensus analyst estimates of $1.43 and $93.9 billion, respectively. Mohan says China's COVID-19 lockdowns, softening App Store sales and forex headwinds are all pressuring Apple's numbers in 2022. However, he says longer-term investors shouldn't sweat a potential earning smiss next week.

"We continue to view Apple as a long-term winner and believe shares have more room to rerate higher as we see significant catalysts including the opportunity to better monetize its installed base, advertising related revenue growth, opportunity in Augmented/Virtual Reality and long-term growth in Services," Mohan said.

Mohan is projecting EPS of $5.83/$6.35/$6.82 for Apple in 2022/2023/2024, below consensus analyst estimates of $6.15/$6.55/$6.91. He is projecting revenue growth of 6.1% in 2022 and 7.9% in 2023.

Benzinga's Take: Even if Apple's underlying business slows, its incredible cash flow and aggressive buybacks can help support EPS and the stock's share price. Any way you look at it, Apple is one of the highest-quality businesses and stocks on the planet.