Apple Earnings – Here’s What Analysts Expect

Apple (NASDAQ: AAPL) will report earnings next week Thursday, February 2, and given the recent headwinds the company and technology sector, in general, have faced over the last few months, there is no certainty the iPhone maker will outperform expectations.

Apple shares have performed well since the turn of the year — up 10% in 2023 — and it seems as though investors are pricing in an earnings beat.

While it would be no surprise to see the more than 2 trillion dollar company outperform expectations, supply chain and demand headwinds could have taken their toll.

Nevertheless, here’s what Wall Street analysts are saying ahead of Apple’s report: 

Bernstein analysts said in a note to clients recently that the demand for Apple iPhones should decline in 2023 after two strong years, while Macs and iPads may have been COVID beneficiaries. Bernstein believes consensus estimates for Apple earnings are too high for 2023.

At UBS, analyst David Vogt maintained a Buy rating and $180 price target on Apple ahead of its fiscal second-quarter results, telling investors that while he had previously lowered his estimates due to Covid-related disruptions in China, his forecasts do not reflect the recent strength in four key currencies – EUR, GBP, YEN, and CNY – against the dollar. 

As a result, the analyst believes his FX headwind guide is too conservative by 400-500bps, mitigating revenue and earnings risk.

Finally, Deutsche Bank analyst Sidney Ho cut the firm’s price target on Apple shares to $160 from $170, maintaining a Buy rating ahead of the earnings release. 

The analyst sees Apple reporting fiscal Q1 results at or slightly above Deutsche's estimates, adding that channel checks suggest that the constraints have improved, and Apple's Q1 results could end up better than estimates. 

Deutsche Bank is more cautious about consumer spending in 2023, but they believe Apple shares have mostly priced in a downward revision in estimates and, in contrast to UBS, they see Apple benefitting from a more favorable foreign exchange environment.