Apple’s Tough Year Should Be Bought On Weakness


  • Apple experienced an FX headwind of -800 bps, which took analysts by surprise, as it was an added -4 percentage point impact that wasn’t anticipated given geographic mix was unfavorable.
  • Apple reported a 5% sales decline, and earnings missed estimates; however, we find ourselves raising our expectations on FY ’24 and FY ’25 results given the weak shipments this quarter.
  • Apple’s hardware business is cyclical in nature, we anticipate demand and supply will improve over the course of the year, we expect 12% revenue growth in FY ’24.
  • We expect Apple to build up inventory to offset shortage like conditions, which creates a directional bias that’s more positive heading into FY ’24.
  • We expect AAPL will generate more sales as a consequence, and we value the stock on FY ’25 estimates, so we raise our price target by $5 from $155 to $160 to reflect demand recovery over the next couple of years.

Apple Holds Launch Event For New Products At Its Headquarters

Justin Sullivan

Apple (NASDAQ:AAPL) managed to recover in the afterhours session following Q1 FY ’23 results despite the softening revenue and earnings headwinds where the stock underperformed primarily due to FX swinging revenue by -800 basis points, and handset revenue decline. However, we expect

Trade Theory

Apple Financial Model Q1’23 (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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