UBS maintains Apple stock at neutral with $210 target

On Friday, UBS analysts maintained their Neutral rating on Apple (NASDAQ:AAPL) stock, with a price target set at $210.00. According to InvestingPro data, analyst targets for Apple range from $165 to $300, with 7 analysts recently revising their earnings estimates upward. The company maintains a strong financial health score of "GOOD" and remains a prominent player in the Technology Hardware industry. The firm’s assessment followed Apple’s March quarter results, which aligned with UBS’s projections. The tech giant, currently valued at over $3 trillion, has demonstrated modest growth with a 2.61% revenue increase over the last twelve months. However, the company’s limited guidance for the June quarter due to tariff uncertainties has drawn attention. Apple anticipates revenue growth in the range of "low single to mid-single digits" for June, which is slightly below UBS’s expectations by approximately 100 basis points.

Apple did not provide detailed segment information, which has caused concerns about a potential year-over-year decline in iPhone revenue for June. UBS noted that if the ’Services’ segment continues to grow at the 14% FXN rate seen in the March quarter, it could contribute nearly 4 percentage points to growth in June. Despite this, the iPad is expected to face challenging comparisons in June, and there is a possibility that tariffs could negatively impact iPhone demand.

Additionally, Apple has taken steps to mitigate cost pressures from tariffs by building up component inventory. This was evident in the increase of purchase obligations quarter over quarter from the $39.8 billion recorded at the end of December. The company anticipates that the current tariff situation will add approximately $900 million to the cost of goods sold (COGS) in the June quarter. This increase in COGS is expected to reduce gross margins by 100 basis points, leading to a forecasted gross margin range of 45.5%-46.5%. This projection is consistent with UBS’s estimate of 46.2% and aligns with Apple’s current gross profit margin of 46.52%. For detailed analysis and more insights, including Fair Value estimates and comprehensive financial metrics, check out the full Apple Research Report on InvestingPro.

In other recent news, Apple reported its second-quarter fiscal year 2025 earnings, revealing a 5% increase in both revenues and net profit, with earnings per share growing by 8%. Despite these gains, Apple’s management forecasts only low to mid-single-digit revenue growth for the upcoming quarter, anticipating a $900 million impact from tariffs. DA Davidson analysts responded by raising Apple’s price target to $250, citing strong iPhone sales, while Jefferies downgraded the stock to Underperform with a target of $170.62, expressing concerns over declining product gross margins. Rosenblatt Securities also downgraded Apple to Neutral, setting a price target of $217, due to uncertainties about future iPhone sales growth driven by artificial intelligence. Citi maintained a Buy rating with a $240 target, highlighting growth in iPhone and Mac sales, although wearables and Greater China sales declined. The company is appealing two recent legal rulings in the European Union and California, which could impact its operations. Meanwhile, Apple announced a $100 billion share buyback program, signaling confidence in its financial health despite challenges.

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