Investment bank JP Morgan is expecting Apple to report September quarter earnings results that modestly beat expectations and for continued guidance upside into the iPhone 12 cycle.
Credit: Apple
In a note to investors seen by AppleInsider, analyst Samik Chatterjee notes that Apple shares continue to outperform the S&P 500, led by iPhone demand, iPad and Mac sales due to remote work and education, and the continuing momentum of Services.
The bank predicts Apple will report revenue of $64.7 billion and an earnings per share of $0.73. Chatterjee notes this is a higher earnings per share than Wall Street's consensus of $63.8 billion in revenue and $0.70 earnings per share.
In addition, Chatterjee says that the focus at Apple's Oct. 29 earnings call could be on guidance, which it forecasts "to track above expectations despite understandable cautiousness driven by the limited visibility into sales velocity for the yet to launch iPhone 12 Pro Max and 12 mini."
For the September quarter, Chatterjee is forecasting "limited near-term upside on iPhone volume estimates." That's largely because no new iPhone models were released in the September quarter, so shipments were driven by existing models.
Based on that, JP Morgan is trimming its iPhone shipment forecast to 42 million units during the September quarter, "due to lower demand near-term led by the anticipated release of the new 5G iPhones." Data from both CAICT and Wave7 appear to support this thesis.
The analyst expects the iPhone SE to account for 38% of the total Apple handsets shipped in the quarter, followed by the iPhone 11 at 36%.
However, Chatterjee isn't ruling out modest upside in Apple's fourth fiscal quarter. The ongoing coronavirus pandemic continues to sustain tailwinds in the iPad and Mac categories, and the launch of the Apple Watch SE and Apple Watch Series 6 could drive strong wearables demand.
Looking beyond the September quarter, Chatterjee expects the iPhone 12 lineup to drive demand. The analyst raised his December quarter forecast to 85.5 million iPhones shipped, up from 83.5 million. Throughout 2020, Chatterjee predicts Apple will ship about 230.5 million iPhone units, up from 225.1 million.
The analyst maintains his AAPL price target of $150, based on a Dec. 2022 EPS estimate of $5.02 and a blended price-to-earnings multiple of about 30x.