Analysts on Wall Street are cautious on Apple ahead of the tech giant's fiscal fourth-quarter report Thursday amid signs of softening demand. The tech giant's quarterly results come on the heels of several product launches. Apple released its long-awaited iPhone 15 product line with USB-C charging in September, as well as a new Apple Watch and updated AirPods. On Monday night , it held an unusual night-time launch event to announce its new PC chips, Macbook Pro laptops and iMac model. The company has also been quietly ramping up spending in artificial intelligence . The September quarter results will only encompass approximately a week of the iPhone 15 sales. Analysts will be keeping a close eye on the company's current December-quarter guidance for insight on iPhone 15 sales. The December quarter is also historically Apple's biggest period of the year by revenue. However, concerns over a weakening consumer, foreign exchange fluctuations, supply issues and decreasing market share in China are weighing over sentiment. Shares have pulled back about 11% from their year-to-date intraday high reached in July. Nonetheless, the stock is 36.5% higher in 2023. AAPL YTD mountain Apple stock in 2023 The company will post its September quarter results Thursday after the bell. Analysts are estimating earnings of $1.39 per share on revenue of $89.28 billion, according to LSEG, formerly known as Refinitiv. According to StreetAccount, Apple has beaten consensus earnings in 17 of the last 20 quarters. Take a look at what analysts are forecasting ahead of the company's announcement: Deutsche Bank trims price target Deutsche Bank reduced its price target on shares to $200 from $210. The company has a buy rating on shares. "Our prior F1Q revenue estimate of +10% y/y (vs. Street's +5% y/y) could be too optimistic as this year's F1Q has one less week vs. a year ago, while initial iPhone 15 sell-through has been mixed and increased competition in China could lead to lower iPhone sales in the region. That said, we remain positive that gross margin would improve y/y driven by a continued mix shift toward higher-end SKUs, strategic buy-aheads of certain components, and reduced FX headwinds." Goldman Sachs maintains buy rating Goldman Sachs analyst Michael Ng expects relatively in-line results for the September quarter. Ng kept his buy rating and $213 price target on shares, which implies more than 22% upside potential from Wednesday's close. "We're encouraged by the acceleration in Services revenue growth driven by a recovery in app spending, as well as continued growth in the iPhone installed base and increasing hardware attach per user. For F1Q24, we forecast EPS of $2.12 ahead of consensus of $2.10, on better gross margins and opex, despite revenue growth of 4% yoy (v. consensus +6% yoy)." JPMorgan stays overweight JPMorgan reiterated its overweight rating and price target of $230. The bank acknowledged that sentiment "has turned more challenging" for the company in recent days due to tepid global consumer spending growth. "While we see challenges for Apple stemming from higher competitive pressures in China, as well as the macro backdrop remaining challenging globally, the results and outlook on the upcoming print this week might have more nuances to it relative to the broader bearish sentiment for the shares, which has led the valuation multiple to compress from the recent peak of ~30x to a more reasonable 27x; although, still at a modest premium to the average trading multiple over the last 2-3 years." Morgan Stanley sees better-than-expected quarter results Morgan Stanley has an overweight rating and $210 price target on Apple. The company is leaning cautious on December quarter results due to iPhone supply shortages and consumer spending concerns. "New data from the last two wks supports our view that Apple will post a better-than-expected Sept Q but guide to a below seasonal/Consensus Dec Q, creating a tactically cautious setup. That said, Services growth and GMs will stand out positively." UBS cuts back full-year estimates UBS pulled back its estimates for the September and December quarters, as well as the 2024 fiscal year to reflect lower demand in the U.S. and China. The firm has a neutral rating and $190 price target, which implies shares rising just 9.2% from Wednesday's close. "While demand trends have been soft throughout the quarter, checks indicate demand did not materially pick-up in Sept. In fact, iPhone sell-through in the month of Sept came in at just 18.7M units, down 11.6% YoY. In addition, we est Macs declined ~24% YoY in the quarter, the 4th consecutive YoY decline as excess inventory from Sept-22 was worked off." — CNBC's Michael Bloom contributed to this report.
