Analysts believe Apple’s quarterly performance may slightly exceed Wall Street’s expectations

J.P. Morgan analysts say Apple is likely to beat Wall Street’s expectations for the quarter ending in June, despite supply chain issues and macroeconomic conditions. In a note to investors, JPMorgan analyst Samik Chatterjee wrote that he is “not as concerned as Wall Street says” about Apple’s upcoming earnings release on July 28. While there may be medium-term risks, he expects Apple’s revenue and earnings per share to be resilient.

Relative to Apple’s conservative guidance on the last earnings call, Chatterjee sees the near-term estimates as better than expected. Better supply chain dynamics will “override” modest demand weakness, and despite Apple’s warning that quarterly revenue will take a $4-8 billion hit, his estimates are now in line with the sell-side consensus, but better than the buy-side expectations.

Wall Street predicted Apple’s revenue for the June quarter would reach $82 billion, which is largely in line with Chatterjee’s estimate of $82.1 billion. However, his forecast is higher than the low and the buyer’s estimate, which hovers in the $78 billion range. Product divisions other than Mac, for example, may not be affected by supply headwinds. In addition, the revenue hit would be below the low end of the previously estimated $4 billion to $8 billion range, according to his estimates.

On the other hand, Chatterjee has revised his revenue and earnings forecasts for Apple down slightly after nearly a quarter. He noted that Mac and iPad growth may be lower as consumer spending softens. This revision may be offset by Apple’s pricing power and ability to buy back stock. Overall, he believes Apple’s shares are capable of outperforming.

The analyst maintains his 12-month Apple price target of $200, which is a 30x P/E based on his 2023 earnings estimate of $6.73.