From Morningstar: 2024-05-03 07:10:00

Morningstar raised Apple’s fair value estimate to $170 per share due to higher expectations for iPhone and services revenue. March-quarter results were in line with projections, but June-quarter guidance fell below expectations. iPhone revenue declined 10% year over year, offset by a 14% increase in services revenue.

Apple’s gross margin in the March quarter increased to 46.6%, supported by a higher mix of services and Google payments. Forecast for iPhone revenue in 2025 increased, anticipating generative AI functionality in the iPhone 16. Apple may announce AI features at its developer conference in June, boosting revenue in 2025.

June-quarter guidance missed optimistic projections, aligning with FactSet consensus estimates. Services revenue continues on a strong growth trajectory, offsetting soft iPhone revenue. Apple expects low-single-digit year-over-year growth, hinting at flat iPhone revenue and double-digit services growth. Apple shares rose after hours in line with valuation raise.



Read more at Morningstar: Apple Earnings: iPhone Growth Forecasts Drive…