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Apple is about to release its earnings for the first quarter of 2026. Shortly before, the final analyst updates are coming in, and JP Morgan's update is particularly significant: The price target for Apple stock is being raised, primarily due to high expectations for demand for the iPhone 18 and the assessment of how strong iPhone sales are likely to be in the Q1/2026 figures.
Apple will announce its financial results for the first quarter of 2026 on January 29. In this context, analysts are releasing their final forecasts. In a note to investors, JP Morgan is not only adjusting its quarterly assumptions but also its valuation of the stock. This provides a clear framework for how JP Morgan assesses Apple's short-term figures and the 2026 product cycle.
New price target: $315 instead of $305
JP Morgan has raised its one-year price target for Apple to $315, up from $305. The last update was in October 2025, when JP Morgan increased the target from $290 to $305.
JP Morgan cites "higher earning power" and a resulting higher price target as the reason for the increased valuation. In terms of valuation, the bank points out that Apple is currently trading at a price-to-earnings ratio (P/E ratio) of 30. This is below the previous high of 32, which, according to JP Morgan, Apple reached at the launch of its 5G smartphones.
2026 as an "important product cycle" with a focus on iPhone 18
JP Morgan expects 2026 to be a "major product cycle" for Apple, leading to even higher profits next year. This expectation is specifically based on a stronger product cycle for the iPhone 18. This expectation of strong iPhone 18 demand is a key driver behind the price target increase.
Forecast for Apple's first quarter of 2026
Total sales above consensus
For the first quarter of 2026, JP Morgan projects total revenue of $139.8 billion. This is above the consensus estimate of $138.4 billion.
iPhone revenue: $80.2 billion, up 16% from the previous quarter
JP Morgan expects iPhone sales to reach $80.2 billion. This represents a 16% increase compared to the previous quarter. At the same time, JP Morgan is highlighting the significant impact that iPhone sales are projected to have on its Q1 2026 financial results.
Services: continued growth, but slightly below consensus
The services sector is expected to continue growing, but according to JP Morgan, this growth will be "weaker" than anticipated. The forecast is $29.9 billion, while the consensus forecast is $30.0 billion.
Margins and costs: within expectations, but Opex lower
Gross margin in the area of the company forecast
JP Morgan expects gross margins to be roughly in line with the company's median forecast, at around 47.6% (%). This fits within the communicated range of 47% to 48% (%).
Operating costs below expectations: 17.5 billion instead of 18.1–18.5 billion
JP Morgan expects operating costs to be $17.5 billion, which is below expectations or forecasts of $18.1 to $18.5 billion.
JP Morgan attributes this, among other things, to the likely delay in the increase of fees for access to LLM models. In this context, JP Morgan points to agreements like the one with Google, which allows Apple to use the Gemini model. This is cited as a building block for implementing the long-awaited overhaul of Siri.
Storage prices: not a major issue according to JP Morgan
Like other analysts, JP Morgan does not see the risk of rising memory prices as a major problem for Apple. This is based on long-term supply and pricing agreements, as well as economies of scale, which limit the potential pressure on margins.
Outlook for the second quarter of 2026: iPhone 17 and services exceeding 30 billion
For the second quarter of 2026, JP Morgan expects year-on-year growth of 10 to 12 percent, reaching $106.2 billion in revenue. Strong demand for the iPhone 17 is cited as the driving force.
Services are also expected to exceed the $30 billion mark in the second quarter of 2026. Gross margins are projected to remain robust at around 48%.
JP Morgan is betting on a strong product cycle at Apple
In summary, JP Morgan paints a clear picture: Apple is viewed favorably ahead of its Q1/2026 earnings report on January 29, primarily due to strong iPhone revenue assumptions, solid margin expectations, and lower-than-expected operating costs. Furthermore, the outlook is positive: 2026 is considered a key product cycle year, with particularly high expectations for the iPhone 18. JP Morgan derives its new price target of $315 from this. (Image: Shutterstock / Stockinq)
Disclaimer: No recommendation for investments
This article does not constitute financial or investment advice. The information contained herein is for journalistic and informational purposes only. Please conduct your own research or consult a financial advisor before making any investment decisions.
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