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Two days before Apple's quarterly earnings report, Goldman Sachs raised its price target for Apple stock from $340 to $370. The bank expects revenue of $110.1 billion, exceeding Apple's own forecast. The rationale focuses less on the past quarter and more on the next.
The upward revision stems from an investor note dated July 27, just days before the release of the third-quarter results on Thursday evening. Expectations are already high: The consensus among analysts is for revenue of around $108.9 billion and earnings of $1.89 per share, compared to $94 billion and $1.57, respectively, in the same quarter last year. The bank's estimate of $110.1 billion is about one percent above this consensus – and at the upper end of Apple's own forecast, which projected revenue growth of 14 to 17 percent, resulting in a maximum of $109.98 billion.
The estimates in detail
The individual segment forecasts add up to exactly the total revenue mentioned:
| Segment | Forecast | Change year over year |
|---|---|---|
| iPhone | 54.80 billion $ | +23 % |
| Services | 31.40 billion $ | +15 % |
| Mac | 9.28 billion $ | +15 % |
| Wearables, Home and Accessories | 7.79 billion $ | +5 % |
| iPad | 6.83 billion $ | +4 % |
| Total | 110.10 billion $ | +17 % |
The iPhone alone would thus account for almost half of the quarterly revenue, with services making up a good 28 percent. A seven percent increase in the average iPhone price, in addition to higher unit sales, is expected to drive growth. Within the services sector, the bank anticipates slowing momentum in the App Store, while product-related services such as iCloud+ and AppleCare+ are expected to compensate.
A price target in the upper middle range
Compared to other houses, the new value does not rank at the top:
| Institute | Course objective |
|---|---|
| Bank of America | 380 $ |
| Goldman Sachs | 370 $ |
| Morgan Stanley | 364 $ |
| UBS | 296 $ |
The range between the most optimistic and the most cautious target is therefore $84. Bank of America leads the field with a buy recommendation, while UBS remains neutral. For Goldman Sachs itself, this is the third correction this year: from $330 in January to $340 in May and now to $370 – a total gain of just over twelve percent since the beginning of the year. Measured against the share price level at which Apple first reached a market capitalization of five trillion dollars on Tuesday, the new target is almost nine percent higher.
Why the price increase barely affected Q3 figures
A key argument of the bank is the price loyalty of its customers: despite price increases triggered by rising storage costs, Apple continues to gain market share because buyers are relatively insensitive to prices. The more affordable iPhone 17e and MacBook Neo models further reinforce this effect.
This cannot yet be substantiated by the figures released on Thursday. The third fiscal quarter covers April to June, and the price increases only took effect at the end of June. Their impact on sales and margins will therefore not be apparent until the fourth quarter at the earliest, which is traditionally the weakest quarter of the fiscal year anyway. The bank's thesis is thus a bet on the coming quarters, not a description of the figures being presented now.
What matters on Thursday evening
The note cites declining demand, supply chain disruptions, competitive pressure, and regulatory interventions in the US and internationally as risks. The supply chain issue is particularly specific: due to chip and memory shortages, Mac mini and Mac Studio deliveries are still subject to waiting times of weeks to months.
More interesting than revenue figures will likely be the gross margin, for which Apple has projected 47.5 to 48.5 percent, as well as the outlook for the current quarter. The conference call begins at 11 p.m. German time and is expected to be the last led by Tim Cook as CEO before he hands over the reins to John Ternus on September 1. (Image: Shutterstock / Peshkova)
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