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Apple’s (NASDAQ:AAPL) solid iPhone demand is set to offset Mac weakness, according to Goldman Sachs analysts.
In a note previewing Apple’s earnings release on May 4, the analysts, who maintained a $200 price target on the Buy-rated stock, said the firm expects “better-than-anticipated results from iPhone.”
Apple shares are up more than 26% in 2023, although the stock dipped around 1% on Friday and is down slightly below the $165 mark premarket Monday.
“Services growth should benefit from the expansion of 1P advertising slots in Apple Search Ads, price increases in Apple TV+/Music/One, and moderating yoy headwinds from App Store and forex. AAPL likely will achieve a record iPhone active installed base (GSe: >1.1 bn), which is supportive of increased earnings visibility and valuation,” the analysts wrote.
In addition, Goldman Sachs expects AAPL to announce an increase in its buyback authorization of at least $90 billion, while they also see the tech giant guiding F3Q23 revenue to decline at similar levels to F2Q23, “driven by declines in Product/iPhone with Services revenue growth accelerating v. F1H23 driven by easing forex headwinds and improving trends in App Store.”
“We forecast F2Q23 EPS of $1.45 (v. FactSet consensus of $1.43) with revenue of $94.5 bn (-3% yoy) including Product revenue of $73.4 bn (-5% yoy) and Services revenue of $21.1 bn (+7% yoy),” the analysts concluded.
