Apple set to report in-line quarter as iPhone gains share, Services tracks estimates

Apple Inc (NASDAQ:AAPL, XETRA:APC) is expected to present an in-line fiscal third-quarter performance, with UBS forecasting dependable iPhone maturation and Services gross broadly tracking expectations contempt ongoing proviso concatenation pressures.

UBS expects full gross to travel successful astatine $107.8 billion, somewhat beneath Visible Alpha statement of $108.1 billion, portion forecasting iPhone gross of $53.3 billion, astir successful enactment with statement and representing astir 20% year-over-year growth.

The analysts wrote that transmission checks suggest Apple's iPhone concern gained marketplace stock during the quarter, supported by pricing trends and continued request for higher-end smartphones. UBS noted that Apple was the lone large smartphone vendor not to rise prices during the June quarter, which helped the institution summation stock crossed cardinal markets including the US, Europe and China.

The steadfast besides highlighted that rising constituent costs, peculiarly for memory, person benefited premium smartphone request arsenic consumers person continued to favour higher-priced devices implicit mid-range and lower-end models.

UBS expects the iPhone 17 lineup to person taken stock during the quarter, though the analysts cautioned that the marketplace whitethorn already beryllium pricing successful stronger-than-expected results. Apple shares are trading astatine astir 35 times guardant statement earnings, which UBS views arsenic limiting the imaginable risk-reward profile.

Services gross is expected to turn astir 13% connected a overseas exchange-neutral basis, according to UBS, with constricted upside owed to challenges affecting App Store gross and Google search-related payments.

UBS forecasts diluted net per stock of $1.84, somewhat beneath Visible Alpha statement of $1.87. The steadfast noted that net could person a humble boost if operating expenses travel successful astatine the little extremity of Apple's guidance range, which UBS estimates would beryllium astir $18.8 billion.

The analysts expect gross borderline for the June 4th to travel successful astatine 48.0%, successful enactment with statement and wrong Apple's guided scope of 47.5% to 48.5%. UBS expects higher representation costs to unit iPhone margins, partially offset by the payment of lower-cost inventory flowing done outgo of goods sold.

The steadfast estimates iPhone gross borderline of astir 39.5%, down astir 250 ground points from the anterior quarter. Looking up to the September quarter, UBS forecasts consolidated gross borderline of 47.5%, with the payment from lower-cost constituent inventory expected to fade.

UBS expects the imaginable motorboat of a foldable iPhone could supply immoderate borderline support, noting that the instrumentality could transportation higher margins than existing premium models. However, the steadfast cautioned that iPhone margins could look unit if Apple does not rise prices.

UBS maintained its $296 terms people for Apple, based connected a valuation of astir 30 times its calendar 2027 net estimation of $9.86 per share. Apple shares traded hands astatine $335 connected Friday, up 23% successful the twelvemonth to date.