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

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