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Investing.com -- Apple’s App Store revenue grew ~13% year-over-year in February, marking a slowdown from ~18% growth in January, according to UBS analysts.
The bank attributed the ~500 basis point deceleration to tougher year-over-year comparisons, particularly in the U.S. and international markets.
In the U.S., “the App Store grew ~12% YoY in February, lower than January’s ~14%, against a ~21% comparison,” UBS noted.
Internationally, revenue growth was stronger but still slowed, with the App Store expanding by ~14% YoY, a ~600 bps decline from January’s pace, said the bank.
On a foreign exchange-neutral basis, UBS stated that February’s growth was ~14.7% YoY, down from ~20.8% in January.
Despite the slowdown, the quarter-to-date (QTD) App Store growth stands at ~15%, driven by January’s strong performance.
“On an FX-neutral basis, QTD grew 16.6%,” UBS analysts wrote. Given that the App Store contributes approximately 25% of Apple’s Services revenue, UBS believes the QTD trend suggests potential upside for Apple’s guidance of low-double-digit growth for its Services segment in the March quarter.
However, the bank’s analysts remain cautious about extrapolating the data, given January’s easy compare.
UBS maintains a $236 price target for Apple (NASDAQ:AAPL), reflecting 32x projected CY26 EPS of $7.49.
The firm believes the valuation is supported by lower equity risk premiums, lower interest rates, and Apple’s ongoing share buyback program.