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With good iPhone earnings expected, analysts turn to holiday quarter

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Apple is edging slightly ahead of Wall Street's expectations for the September quarter that includes the iPhone 14 launch, so analyst focus is already starting to shift to the crucial holiday quarter.

In a note to investors seen by AppleInsider, investment bank Cowen predicts Apple modestly exceeding Wall Street's expectations for the September quarter but will be in line with guidance for the holiday quarter.

Apple's premium iPhones are the primary factor driving its revenue growth, according to Cowen. However, lower demand for the iPhone 14 Plus than analysts were expecting is called a risk factor.

A report from October 18 claimed that Apple has cut production for the iPhone 14 Plus, although that interpretation is likely flawed based on only two supply chain sources.

Cowen predicts that Apple will ship 51 million iPhones in calendar quarter three, which matches what other industry analysts are forecasting. Shipments in calendar quarter four could be in the low-80 million range.

The analysts have slightly lowered expectations for iPhone shipments in the December 2022 quarter and March 2023 quarter to 82 million and 55 million, respectively. The previous prediction was 83 million and 58 million.

Sales for iPad and Mac are expected to see double-digit percentage growth year-over-year, and increasing enterprise adoption of the iPad could help offset decreased consumer demand. Mac sales for the calendar year 2022 could see +5% growth year-over-year.

Apple's Services business, which includes AppleCare, iCloud and more, is predicted to see +9% growth year-over-year for calendar quarter three. Cowen expects an improvement in quarter four, forecasting an +11% increase year-over-year driven by higher App Store spending during the holidays.

Cowen maintains its $200 price target for AAPL, based on a 22x earnings multiple on Apple's hardware business and a 39x multiple on the recurring revenue of the Services business. This leads to a blended 30x multiple on the bank's estimated earnings-per-share of $6.65 for the calendar year 2023.

AAPL stock has outperformed the Nasdaq by 12% for the year to date and beaten the S&P index by 3%.