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Piper Sandler hikes Apple stock price target to $220 on long-term forecast

While Apple may see earnings below Wall Street's expectations on the quarter, the iPhone 15 and strong China results have driven an Apple Stock price target increase by investment bank Piper Sandler.

Analysts are offering their opinions on Apple's financial status ahead of the August 3 Q3 2023 financial results release. In the view of Piper Sandler, the quarter after that is more interesting.

In a note to investors seen by AppleInsider, Harsh Kumar at Piper Sandler uses its "Apple Earnings Preview" to discuss Chinese demand for the most part, with the majority of attention being on the September quarter, rather than the June one about to be released by the company.

The June-specific comments has analysts expecting Apple to "slightly miss Street EPS expectations of $1.19 by between $0.02 to $0.04." Overall revenue is similarly going to miss the street's $81.7 billion estimate, by being "slightly lower."

"Overall, we feel that Apple will be able to execute in its key segments and markets for the June quarter," the report states.

Discussing China, Apple's iPhone is "gaining meaningful share" despite concerns about a potential slowdown. "We beg to differ and believe that the Chinese population is selectively choosing iPhones over Android devices," Piper Sandler asserts, with "positive momentum" over the last three quarters.

"We believe that the concerns about China's slow-down for iPhone might be at a minimum relatively, if not completely, overblown."

Apple should get about 10% of its sales from iPhones sold in China, the analysts reckon. On the assumption the Chinese market declines in the mid-single digits and Apple keeps up with the pace in what is proposed is the "worst case scenario," the impact will only amount to 0.5% of Apple's iPhone sales in the quarter.

Meanwhile, India is serving as a rapidly emerging market for Apple, with prospects to become a 4% contributor of iPhone sales in the June quarter.

"Overall, we feel that Apple is holding up a lot better in the Chinese end market, and might be able to offset meaningful declines if any," summaries the analysts.

Much of the report discusses September results, with the June quarter setting Apple up for the next period. Expecting Apple to not provide guidance for the quarter, Piper Sandler estimates "Apple will deliver September assumptions that will match or slightly exceed street expectations" based on China and India success.

For September, Piper Sandler reckons the Street will be "comfortable" with a $90.3 billion revenue forecast and a 1.36 EPS.

Piper Sandler rates Apple with a price target of $220, a raise from the $200 it set in January 2022.