Apple earnings: Date, Street expectations and analyst comments

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By Senad Karaahmetovic

Apple (NASDAQ:AAPL) is due to report its FQ123 results after the market close on February 2, 2023. The conference call to discuss results is scheduled for February 2, at 14:00 PT/17:00 ET (22:00 GMT). The Street is looking for Apple to report earnings per share (EPS) of $1.98 on revenue of $123.39 billion.

Apple stock lost about 17% in the final weeks of 2022 on reports the Cupertino-based titan is experiencing weakening demand for its hardware products. As a result, several analysts slashed their FQ1 estimates for Apple, leading to lower stock price targets as well.

Sell-side analysts cited soft demand and prior supply issues as Apple’s major supplier Foxconn (TW:2354) was fighting worker protests and strict COVID-19 lockdowns.

Apple shares fell to $124.17 on the first trading day this year, marking the lowest level seen since June 2021. However, softer-than-expected wage growth in the U.S. helped improve the sentiment for tech stocks, paving the way for Apple stock to rally about 8.5% from its January low.

Apple also announced that its annual meeting for shareholders will be held virtually on March 10, at 09:00 PT/12:00 ET (17:00 GMT).

What are Street analysts saying about Apple stock?

Rosenblatt (cuts price target to $165, reduces FQ1 estimates): “We expect better trends in later periods, reflective of a more normalized environment… We assume Apple can deliver MSD LT sales/EBITDA growth, with repo driving ~10% in EPS. The company's brand leadership, and innovation opportunities (EV cars, AR/VR, financial/media services) we believe will allow it to retain a premium 20x P/ FCF in 10 yrs, NPV'd to $165 in year, with estimate cuts driving the 13% PT reduction.”

Barclays (cuts price target to $133, lowers FQ1 and FQ2 estimates): “We did another round of checks with China channel and supply chain partners in the last few days. What started out as production-driven cuts has moved to demand weakness across product categories… At a 20% premium to the S&P 500, we see the stock as fairly valued at best. Manufacturing issues aside, we believe we are witnessing the catch-up from strong COVID performance across product categories. Service revenues have been decelerating as well. We see pressure to estimates and PE multiple in 2023.”

Wedbush (cuts price target to $175): “The core iPhone 14 Pro demand appears to be more stable than feared and is still coming out of the supply chain abyss seen in November/December due to the zero COVID lockdowns in China/Foxconn. While March and June could see some cutting of iPhone orders (iPhone 14 Plus remains a major strikeout), we believe the overall demand environment is more resilient than the Street is anticipating and thus we believe baked into the stock is a massive amount of bad news ahead."

KeyBanc (reaffirms Buy): “Consensus expects a lower growth quarter than AAPL's historical average. Consensus Hardware revenue estimates have come down (iPhone revenue/units are -5%/6%, respectively, since the end of Oct.) in response to the impacts to supply and demand for iPhone, though we believe there is still room for further downside risk, and we would expect buy-side expectations to be conservative.”

Morgan Stanley (reaffirms Overweight, sees $115-120 as a near-term floor for Apple stock): “We 1) have not picked up any recent readjustment to product orders in our supply chain checks, 2) have already baked in what we believe in an appropriately conservative near-term forecast, and 3) believe that bigger picture, the core drivers of Apple's model remain unchanged.”

Evercore ISI (reaffirms Outperform): “Growth rates should continue to improve through 2023 as comps get easier and we should see mid-single digit or better growth every quarter in 2023. In addition to the easier comp and China recovery, the drivers of the improvement this month likely also include a weaker dollar and the price increase pushed through by Apple starting in early October.”