Apple Analyst Raises iPhone Revenue Estimates Despite Macroeconomic Uncertainties — 2 Factors At Play

Zinger Key Points
  • The inflationary environment seen currently and the threat of a looming recession has dampened consumer sentiment.
  • Consumer-facing companies could suffer due to the evolving economic conditions but an analyst sees Apple remaining immune.

Macroeconomic uncertainties have not spared the high-and-mighty in the tech sector but an analyst is confident that Apple Inc. AAPL will outperform hardware revenue expectations in the September quarter.

What Happened: KeyBanc Capital Markets' “First Look Data” showed strong high-value (over $399) credit card and debit spending by U.S. consumers in September. Indexed spending rose 11% month-over-month, analyst Brandon Nispel said.

This is against the historical pattern of a deceleration in spending in September, relative to August, he added.

See Also: Apple 'Data Rapidly Rebounded,' Analyst Says, Citing 'Strong Start' For iPhone Sales

The analyst said that the consensus forecast for the 2022 September quarter predicts 8% growth. He went on to highlight that over the past three years, Apple’s September quarter hardware revenue increased by 10% quarter-over-quarter.

KeyBanc estimates 11% growth, implying an upside to the consensus estimate, Nispel added. Apple’s hardware products fetched about three-fourths of the total revenue in the June quarter.

Nispel expects Apple’s September quarter to have benefited from an extra week of iPhone sales, a shift in the product mix toward more expensive devices like the Pro and Pro Max and the $899 iPhone 14 Plus replacing the $699 iPhone 13 Mini.

Accordingly, the analyst raised his September quarter revenue and adjusted EBITDA estimate for Apple to $90.4 billion and $30.4 billion, respectively.

Nispel maintained an Overweight rating and $185 price target for Apple shares.

Price Action: Apple closed Monday’s session $140.42, up 0.24%, according to Benzinga Pro data.

Read Next: How to Buy Apple (AAPL) Stock

Market News and Data brought to you by Benzinga APIs
Price Target
Posted In: Analyst ColorNewsReiterationAnalyst RatingsTechGene MusteriPhoneKeyBanc Capital MarketsLoup Funds
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!