Apple: A Buy Ahead Of Q1 Earnings Announcement


  • Apple hardware expected to struggle with iPhone shipments in focus on Q1 ’23 earnings with IDC survey data suggesting a -15% decline in shipments in Q4 ’22.
  • We anticipate Apple to beat expectations, a combination of foreign exchange, inventory burn, and pricing to deliver above consensus figures and survey figures.
  • Our model implies modest upside as we’re limited to a $155 price target, but find ourselves recommending the stock given the strength of the business versus peers.
  • We don’t expect layoffs to be that significant but a more generous capital return policy in the form of share buybacks could add upside to our price target.
  • We expect gross margins and operating margins to trend higher on the greater contribution of internally sourced components driving the bill of materials lower across the product stack over time.

Entrance of the apple store in Brussels, Apple logo on the window.

Media Lens King/iStock Editorial via Getty Images

Apple investment thesis

We’re heading into the Apple (NASDAQ:AAPL) quarter with mixed indications from analysts and other companies on hardware particularly smartphone shipments heading into Q1 ’23 earnings results. That being said, we anticipate

J.P.Morgan Apple Survey

J.P. Morgan Apple Availability (J.P. Morgan)

Apple financial model

Trade Theory Financial Model on Apple (Trade Theory)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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