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On Monday, BofA Securities maintained a Buy rating on Apple Inc. (NASDAQ:AAPL) with a steady price target of $250, sitting within the broader analyst range of $165-$300. According to InvestingPro data, Apple commands a market capitalization of $3.08 trillion, with the stock currently trading at $204.94. The decision comes after a recent announcement over the weekend regarding tariff adjustments. Consumer electronics, including those from Apple, are now temporarily exempt from the heightened 125% reciprocal tariffs on Chinese goods, reverting to the previous rate of 20%. The Trump administration has indicated this as a provisional measure, with plans to include electronics and other items such as solar cells and semiconductors in future sectoral tariffs.
BofA Securities analysts addressed the implications of the new 20% tariff rate on Apple, considering the company’s significant manufacturing presence in China. They anticipate that Apple will strategically navigate its supply chain to mitigate the tariff impact. The company’s robust gross profit margin of 46.52% and strong EBITDA of $137.35 billion provide substantial cushioning against potential cost pressures. However, should the tariffs persist or increase, and if Apple were to absorb the full brunt of these costs into its cost of goods sold (COGS), there could be an estimated $0.41 reduction in earnings per share (EPS) in calendar year 2026.
Despite these potential challenges, BofA Securities views any anticipated EPS reduction as relatively minor compared to the broader economic risks posed by an intensifying trade war. The analysts suggest that Apple’s stock might be perceived as a relative safe haven given the company’s robust margins, strong cash flows, and consistent capital returns.
The analysis by BofA Securities reflects confidence in Apple’s ability to weather tariff-related headwinds, supported by the company’s financial stability and strategic supply chain management. The firm’s reiteration of a Buy rating underscores a belief in Apple’s continued performance and resilience in the face of global trade uncertainties.
In other recent news, Apple has reported significant developments impacting its financial outlook and market position. Apple led global smartphone sales in the first quarter, driven by the launch of the iPhone 16e, with strong demand noted in Japan and India, according to Counterpoint Research. In terms of stock evaluations, JPMorgan has adjusted its price target for Apple from $270 to $245, maintaining an Overweight rating, while KeyBanc upgraded Apple to sector weight from underweight, citing recent tariff exemptions as a positive factor.
The tariff exemptions announced by the U.S. administration excluded smartphones and PCs from new tariffs, providing relief for Apple and potentially boosting investor confidence in its medium-term growth prospects. However, ongoing uncertainties regarding future tariffs and their impact on costs and consumer demand pose risks to Apple’s financial health, as noted by analysts at Needham. Additionally, China’s recent decision to increase tariffs on U.S. goods could affect Apple’s profitability, given the geopolitical tensions and Apple’s sales exposure in China.
Despite these challenges, the tariff exemptions have been viewed as a positive development for Apple, with Needham maintaining a Buy rating and a $225 price target. The ongoing trade tensions and tariff changes continue to be a focal point for investors as they assess Apple’s future performance and market strategy.
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