Macroeconomic uncertainties have not spared the high-and-mighty in the tech sector but an analyst is confident that Apple Inc.
will outperform hardware revenue expectations in the September quarter.
KeyBanc Capital Markets’ “First Look Data” showed strong high-value (over $399) credit card and debit spending by U.S. consumers in September. Indexed spending rose 11 percent month-over-month, analyst Brandon Nispel said.
This is against the historical pattern of a deceleration in spending in September, relative to August, he added.
The analyst said that the consensus forecast for the 2022 September quarter predicts 8 percent growth. He went on to highlight that over the past three years, Apple’s September quarter hardware revenue increased by 10 percent quarter-over-quarter.
KeyBanc estimates 11 percent growth, implying an upside to the consensus estimate, Nispel added. Apple’s hardware products fetched about three-fourths of the total revenue in the June quarter.
Nispel expects Apple’s September quarter to have benefited from an extra week of iPhone sales, a shift in the product mix toward more expensive devices like the Pro and Pro Max, and the $899 iPhone 14 Plus replacing the $699 iPhone 13 Mini.
Accordingly, the analyst raised his September quarter revenue and adjusted EBITDA estimate for Apple to $90.4 billion and $30.4 billion, respectively.
Nispel maintained an Overweight rating and $185 price target for Apple shares.
By Shanthi Rexaline
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