Apple Q1 Earnings Preview: What Wall Street Is Saying Ahead Of The Report

Apple Inc. AAPL will continue to dominate headlines ahead of its earnings report on Thursday, Feb. 1.

The company is scheduled to report first-quarter earnings, which some investors are hoping will be the final catalyst to propel the stock's valuation above the $1-trillion mark. The stock is up more than 8 percent over the last three months, trading around the $171 area.

Consensus EPS estimates stand at $3.78 with revenue coming in at $85.9 billion.

JPMorgan: Weakness In First Half Of 2018

Analysts at JPMorgan said in a brief report their research suggests "weakening Apple supply chain orders" will persist through the first half of 2018. Moreover,

Gene Munster: All Is Well

Former Wall Street research analyst-turned-venture capitalist Gene Munster is no stranger to Apple's business. In a

It's likely that the iPhone X reached a supply-demand equilibrium in the middle of January, which implies that a small amount of iPhone X demand from 2017 "spilled over" into the March-ending quarter, Munster said. The services sector, while still important for investors, will be taking a "back seat" to the iPhone in the upcoming report, he said. 

BTIG: Verizon Could Be Foreshadowing iPhone Concerns

Verizon Communications Inc. VZ said in its fourth-quarter report it saw a 7-percent decline in smartphones sold on a 7.2-percent upgrade rate, BTIG's Walter Piecyk said in a note. This happens to be the wireless provider's lowest fourth-quarter upgrade rate in the past decade and at levels typically seen in the quieter June quarter.

Verizon's rivals are expected to report similar disappointing metrics, which calls into question the iPhone's performance so far. Investors could expect to see Apple guide its revenue outlook for the March-ending quarter to be as low as $60 billion, which is $8 billion shy of the consensus estimate, Piecyk said. 

Rosenblatt Securities: Overblown Concerns

Apple is likely to report a stronger-than-expected fiscal Q1, but the company could guide its March quarter-ending revenue below the Street's current estimate of $68 billion, Rosenblatt's Jun Zhang said in a note. This isn't necessarily a bearish sign given expectations for Apple to recognize a portion of the iPhone X units that were produced in December; iPhone SE2 shipments potentially starting in March; upside from the HomePod; and continued strong demand for AirPods, according to Rosenblatt. 

Rating And Price Targets

Zhang maintains a Buy rating on Apple's stock with a $180 price target.

Piecyk maintains a Buy rating on Apple's stock with a $198 price target.

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Photo courtesy of Apple.