From Morningstar: 2024-11-01 05:34:47

The fair value estimate for Apple has been raised to $200 from $185 due to increased longer-term growth expectations. Short-term iPhone revenue forecasts have been revised down, reflecting less impact from artificial intelligence on unit sales over the next two years. Apple Intelligence is expected to drive mid-single-digit growth in iPhone revenue over the next five years.

Despite positive growth prospects, shares of Apple are considered overvalued due to slowing iPhone revenue growth in a mature smartphone market, especially in China. September-quarter revenue rose 6% year over year, with iPhone revenue up 6% as well. Services saw 12% growth and made up 75% of revenue.

Lowered December-quarter revenue guidance and a slower ramp in iPhone 16 unit sales have led to a decrease in iPhone revenue forecasts for fiscal 2025. Apple Intelligence is expected to boost sales, but a staggered release schedule may impact demand. Stronger growth is projected for fiscal 2026 with a more developed AI offering.

Outgoing CFO Luca Maestri announced his departure in August. Kevan Parekh, VP of financial planning, will take over the CFO role. No significant changes in financial management are expected. Maestri oversaw margin expansion and cash position reductions. Parekh is expected to continue these efforts.



Read more at Morningstar: Apple Earnings: Our Valuation Rises to Reflect…