Investing.com — is a “tactical long into earnings,” according to Morgan Stanley analyst Erik Woodring, who sees the iPhone maker’s upcoming results as a clearing event ahead of a seasonally strong stretch for the stock.
Woodring expects modest upside of 1% to 2% against consensus estimates for the March quarter revenue and earnings per share, with supply constraints limiting further gains.
For the June quarter, Morgan Stanley is 5% above Street revenue estimates but 170 basis points below consensus gross margins, arriving at an in-line EPS forecast of $1.74. The bank sees this outcome as better than feared.
Rising memory costs are expected to pressure margins, but Morgan Stanley said continued strength in iPhone, Mac and Services revenue should more than offset that headwind.
Beyond the near-term print, the bank sees several catalysts supporting the stock through year-end, including supply chain checks pointing to share gains, Apple’s Worldwide Developers Conference on June 8 where expectations are low but a meaningful Siri redesign could act as a sentiment tailwind, and the launch of a foldable iPhone in the fall.
Morgan Stanley also flagged Apple’s free cash flow generation as a relative positive against a backdrop of rising capital expenditure among large-cap technology peers.
The bank rates Apple at overweight with a price target of $315, based on $9.76 of fiscal year 2027 EPS, approximately 5% above Street consensus.
“We see a path to $300 for Apple shares by this September, driven by modest multiple expansion and more robust positive EPS revisions,” Woodring wrote.
