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An Apple store in New York City.
Spencer Platt/Getty Images
The big story on
Apple
this week remains the ongoing concern that iPhone 13 production has been constricted by an inability to get enough parts. That disclosure has triggered a flurry of Wall Street commentary debating the severity and implications of the issue.
On Thursday, one analyst cut estimates and another warned that the situation could lead to cautious commentary on the company’s upcoming analyst call following September-quarter earnings.
Apple shares (ticker: AAPL) were up 1.4%, at $142.93, in recent trading. The
S&P 500
was also up 1.4%.
Earlier this week, Bloomberg reported that Apple is likely to reduce planned December-quarter iPhone 13 production targets by up to 10 million units due to a shortage of components from both
Texas Instruments
(TXN) and
Broadcom
(AVGO). Some analysts have noted as well that Apple is having trouble getting enough camera modules for the Pro and Pro Max versions of the phone due to Covid-related manufacturing restrictions on factories in Vietnam, where Sharp apparently produces the modules. None of the companies involved have commented on the reports.
Needham analyst Laura Martin on Thursday trimmed her iPhone 13 shipment forecast for the December quarter by 10 million units, based on both her own channel checks and the recent Bloomberg report. She now estimates 80 million iPhone 13 shipments for the quarter.
Martin cut her revenue forecast for the September 2022 fiscal year to $359.2 billion, from $376.8 billion, which is below her fiscal 2021 forecast of $364.2 billion. She now sees profits for the year of $5.41 a share, down from $5.62, which would again imply a down year from her current fiscal 2021 estimate of $5.53 a share. Nonetheless, Martin maintains her Buy rating and $170 price target on Apple shares.
Meanwhile, Citigroup analyst Jim Suva previewed September-quarter earnings in a research note Thursday, projecting that Apple will beat Street estimates. He’s modeling revenue of $85.8 billion and profits of $1.26 a share, ahead of consensus at $84.9 billion and $1.23 a share. Suva thinks that Apple will once again decline to provide detailed financial guidance, given “the unfortunate surge of the Covid Delta variant” and ongoing supply-chain challenges.
Suva writes that he remains bullish on Apple shares—he maintains a Buy rating and a $170 target price—but adds that upside at this point will depend on “fundamental upside” to sales, profits, and cash flow, rather than multiple expansion.
Apple reports September-quarter results after the close on Oct. 28.
Write to Eric J. Savitz at eric.savitz@barrons.com
