Apple's June quarter won't be doom and gloom, analyst says

Apple iPhones

In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee writes that he is "not as worried as the Street" about Apple's upcoming earnings report on July 28. While there may be medium-term risks, he expects revenue and earnings-per-share to be resilient.

Relative to the conservative guidance from Apple during its last earnings call, Chatterjee believes that near-term estimates are better than expected.

The analyst says that better supply chain dynamics will "overwhelm" the modest demand weakness and Apple's warning of a $4 billion to $8 billion revenue hit in the June quarter. His expectations are now in-line with sell-side consensus, but better than buy-side expectations.

Wall Street is forecasting that Apple will report revenues of $82 billion in the June quarter, which is largely in-line with Chatterjee's own expectations of $82.1 billion. However, his forecast is higher than low and buy-side estimates, which are hovering in the $78 billion range.

For example, Chatterjee says that product segments outside of the Mac are likely unaffected by the supply headwinds. Additionally, the revenue hit is tracking below the low end of the $4 billion to $8 billion range by his estimates.

On the other hand, beyond the near quarter, Chatterjee has revised his revenue and earnings forecast downward modestly. He cites potentially lower Mac and iPad growth as consumer spending softens.

He does add that the revision is likely to be erased by Apple's pricing power and its ability to repurchase shares. Overall, Chatterjee believes Apple shares well well-positioned for outperformance.

The analyst maintains his 12-month Apple price target of $200, which is based on a price-to-earnings multiple of 30x on his 2023 earnings estimate of $6.73.