Top Apple Analyst Forecasts Below-Consensus FY Revenue and EPS, Sees 'Elevated' Valuation

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By Senad Karaahmetovic

The Senior Analyst at Bernstein covering US IT Hardware, believes the risk-reward on Apple (NASDAQ:AAPL) shares is “neutral to modestly negative over the next 3-6 months.”

The tech analyst, one of the most closely-watched on the Street, reminds investors that Apple’s valuations “remains elevated vs. history and its tech peers.” He rates Apple as Market Perform with a $170 per share price target.

“AAPL historically on average has not outperformed in the three months following iPhone launches,” he told clients in a note.

The analyst is cautious on FY 23 financials and sees current Street estimates as aggressive. Bernstein calls for $399 billion in FY revenues and EPS of $6.26, which is lower than the consensus of EPS of $6.44 on revenue of $411 billion.

“We worry that Apple was a pandemic beneficiary, whose fortunes could revert, particularly in China, and forecast that iPhone upgrade rates will slow following two strong years of sales; that iPhone 14 could face a negative mix shift away from Pro offerings, given the wealthiest consumers have already upgraded to 5G; and that Apple is not immune to economic weakness,” he added.

As far as the December quarter is concerned, the analyst is above consensus but warns this may potentially be because of Apple's extra week.

Earlier today, the Nikkei Asia reported that Cupertino-based tech titan plans to use an updated version of TSMC's (NYSE:TSM) latests in iPhones and Macbooks next year.