UBS maintains Neutral Apple stock with $236 target

On Friday, UBS reiterated a Neutral rating on Apple stock (NASDAQ:AAPL), maintaining a price target of $236.00. The commentary from UBS followed Apple’s report on its December quarter iPhone revenue, which showed a slight decline of 80 basis points year-over-year to $69.1 billion. This figure was below the Visible Alpha Consensus (VA Cons) of $70.7 billion but surpassed UBS’s own estimate of $67.2 billion. According to InvestingPro data, Apple maintains strong financial health with total revenues reaching $391.04 billion in the last twelve months, though current analysis suggests the stock is trading above its Fair Value.

According to UBS’s supply checks, which were cross-referenced with sell-through and inventory data, Apple is estimated to have shipped approximately 75.5 million iPhones during the quarter. This represents a 2% decrease from the previous year and is slightly above UBS’s forecast of 74 million units, but below the VA Consensus estimate of 77.1 million units.

The analysis also revealed that the average selling price (ASP) for iPhones in the December quarter was $915, which is close to both UBS’s projection of $908 and the VA Consensus of $918. Despite the modest demand, UBS expressed surprise at Apple’s subdued revenue outlook for the March quarter, especially considering the expected channel fill from the new iPhone SE model.

Apple has projected that its total revenue will grow in the low to mid-single digits in the March quarter. UBS’s breakdown of this forecast suggests that with an estimated 11% growth in Services and a 3% growth in other Product categories, iPhone revenue could range from a 5% decline to a 5% increase, or remain flat at the midpoint. This forecast for the March quarter, which includes the launch period for the iPhone SE, indicates a potential ongoing softness in Apple’s core iPhone portfolio. Apple did not provide specific details on the expected impact of the iPhone SE on its March quarter guidance. With analyst price targets ranging from $190 to $325, InvestingPro subscribers can access 13 additional key insights and a comprehensive Pro Research Report that provides deep-dive analysis of Apple’s financial health and growth prospects.

In other recent news, Apple’s financial performance and future outlook have been the subject of several analyst reports. TD Cowen raised its stock target for Apple to $290, referencing the company’s guidance for low to mid-single-digit percentage year-over-year growth for the upcoming quarter. The company’s robust performance has been supported by steady demand trends in China and the successful rollout of Apple Intelligence.

Piper Sandler maintained a Neutral rating on Apple stock, with a consistent price target of $225, pointing to challenges with iPhone revenue and performance in China. However, the company’s strong financial health score and positive momentum in Q4, driven by iPhone and Mac sales, were noted.

Evercore ISI increased the price target for Apple to $260, following a recent earnings report that exceeded market expectations despite a challenging demand environment in China. The analyst highlighted the growing significance of emerging markets and potential iPhone SE demand as key factors for better-than-expected performance in the coming quarters.

DA Davidson reiterated its Buy rating on Apple shares and raised the price target from $260 to $290, emphasizing the positive impact of Apple Intelligence on iPhone sales growth. The firm expressed optimism about the future expansion of Apple Intelligence and its contribution to iPhone growth.

KeyBanc Capital Markets maintained its Underweight rating on Apple shares, with a steady price target of $200. The firm highlighted a slight decline in iPhone sales year-over-year and a decrease in sales in China. The firm’s cautious stance was influenced by the absence of a U.S. upgrade cycle, increasing competition in China, and the unlikelihood of a significant turnaround across all of Apple’s products and geographies. These are the recent developments for Apple.

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