Gold bars to be exempt from tariffs, White House clarifies
On Friday, Citi analysts maintained a Buy rating on Apple stock (NASDAQ:AAPL) with a steady price target of $240.00. According to InvestingPro data, analyst targets for Apple range from $165 to $300, with 7 analysts recently revising their earnings estimates upward. Currently trading at $204.94, Apple commands a market capitalization of $3.08 trillion, making it a prominent player in the Technology Hardware sector. Their analysis highlighted the growth in iPhone sales for the March quarter, particularly in the higher-end Pro models. Mac sales also saw an increase, attributed to both laptops and desktops, while iPad growth was spurred by the iPad Air. However, the Wearables, Home, and Accessories segment experienced a decline, primarily due to wearables.
In the services sector, Apple continued to register higher sales, driven by advertising, the App Store, and cloud services, similar to the previous quarter. The gross margin in services saw an improvement of approximately 110 basis points, which was attributed to a favorable mix, though this was partially offset by increased service costs and foreign exchange (FX) headwinds. InvestingPro analysis reveals Apple’s overall gross profit margin stands at 46.52%, with the company generating $137.35 billion in EBITDA over the last twelve months. Subscribers to InvestingPro can access detailed margin analysis and 10+ additional expert insights about Apple’s financial performance.
Regionally, Apple’s sales in Greater China showed a decline in the first six months of fiscal year 2025, with iPhone sales falling. The company noted that without the FX impact, sales in China for the March quarter would have been relatively flat. In contrast, all other regions experienced year-over-year growth in the March quarter and the first half of the fiscal year, despite the FX headwinds. The Americas and Japan were buoyed by iPhone and services sales, the rest of the Asia-Pacific region by services and iPhone, and Europe saw growth due to services, Mac, and iPad sales.
Apple’s inventory in the March quarter was reported to be up 1% year-over-year but down 9% quarter-over-quarter. The reduction in components and finished goods inventory suggests a destocking following a significant increase in finished goods in the previous quarter. Manufacturing purchase obligations and vendor non-trade receivables were both reported to be above historical average levels, indicating that Apple is potentially building inventory in anticipation of tariffs and investing more aggressively in supply chain capabilities.
Despite these legal challenges, Apple maintains strong financial health, earning a "GOOD" overall score from InvestingPro’s comprehensive analysis framework. The company operates with moderate debt levels and has demonstrated consistent profitability, though current trading multiples suggest the stock may be overvalued relative to its Fair Value. For detailed insights into Apple’s valuation and future prospects, investors can access the complete Pro Research Report, available exclusively to InvestingPro subscribers. On April 23, 2025, the company was fined €500 million by the European Union for limiting app distribution on its iOS operating system to the Apple App Store. Apple plans to appeal the decision. Additionally, on April 30, 2025, the California District Court ruled against Apple, stating the company cannot impose a commission or any fee on external app purchases and must not restrict how developers direct consumers to make purchases outside of an app. Apple has expressed intentions to appeal this decision as well, with a commitment to vigorously defend its actions and employees.
In other recent news, Apple Inc. reported its second-quarter fiscal year 2025 earnings, showing a 5% growth in both revenues and net profit, with an 8% increase in earnings per share. Despite these results meeting consensus estimates, Jefferies downgraded Apple’s stock to Underperform, citing concerns over declining gross margins and potential tariff impacts. Rosenblatt also downgraded Apple from Buy to Neutral, adjusting the price target to $217, while emphasizing the need for a new innovative product to boost growth. Meanwhile, DA Davidson raised its price target to $250, maintaining a Buy rating, following strong iPhone sales and a $100 billion share buyback program. Morgan Stanley (NYSE:MS) maintained an Overweight rating with a $235 target, noting positive iPhone upgrade trends and steady revenue from China. Apple’s management acknowledged challenges, including an anticipated $900 million tariff impact and weaker sales in Greater China. Despite these hurdles, the company’s strategic moves, such as diversifying production, are seen as efforts to mitigate risks. Investors continue to watch Apple’s developments closely, particularly in the context of geopolitical and economic challenges.
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