© Reuters.
| Investing.com News |
Deutsche Bank analysts examined the state of Apple (NASDAQ:) ahead of the Cupertino-based giant’s announcement this Thursday.
According to their estimates, the company will meet its forecast regarding the results of the quarter when the relief that occurred in the supply chain challenges is expected to offset the weakness recorded in some business sectors.
According to Deutsche Bank’s latest tests, only the iPhone Pro 14 and the iPad Air have long delivery times. The analysts estimate that Apple will report the sale of approximately 51 million iPhone units in its fiscal fourth quarter, which will lead to revenues of $44.8 billion from iPhone sales. Market estimates are 52 million iPhone units with revenues of $42.6 billion.
However, Apple’s other segments may experience a bigger slowdown than expected.
“For the services business, while the company has already assumed that revenues will slow down from their level in the third fiscal quarter of this year at a rate of 12% compared to the previous year, we still see the potential for a larger decline due to another headwind that comes due to the dollar exchange rate and due to the issue of digital advertising. We also see demand Weaker impacts on Apple’s product business, but we think the company should show better data than many of its smartphone and PC peers with product revenue growth of +8% year-on-year.”
said the analysts.
In addition, the analysts published the results of a survey they conducted at Deutsche Bank which showed that 43% of respondents said there was a chance they would purchase a new smartphone within the next three months.
“Among survey participants who intend to buy a new iPhone, ~41% indicated that they would likely purchase the iPhone 14 Pro Max (31%) or the iPhone 14 Pro (10%), while only 18% suggested they planned to buy the iPhone 14 (10%) or iPhone 14 Plus (8%)”,
added
Deutsche Bank’s analysts estimate that the greatest risk for Apple shares stems from the drop in demand reported by the company’s management, as well as from the forecast that the company will present for the next quarter, which may be lower than the early estimates in the market.
“We think that the market is already anticipating the slowdown in growth, especially in light of recent media reports indicating that Apple is cutting iPhone orders and that the stock has retreated approximately 20% from the peak it reached in August. We also believe that the company’s strong balance sheet will stand out in the current environment, supporting dividend payments and share buybacks Shares (buyback) in the total amount of 100 billion dollars per year.
“When investors’ expectations are already low ahead of the publication of the reports and the stock is trading at a reasonable multiple, we believe that the company’s risk-reward profile is attractive and we maintain our “buy” rating.
They concluded.