What To Expect From Apple's FQ4 Earnings?

JP Morgan analyst Samik Chatterjee maintained an Overweight rating on Apple Inc AAPL with a price target of $265.

The rerating reflects Chatterjee’s favorable outlook on the iPhone cycle, led by AI upsides and resilience in Services revenues relative to investor expectations.

The analyst noted upside in several aspects of the business, namely the company’s transformation to Services, growth in the installed base, technology leadership, and optionality around capital deployment.

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The price target is based on applying a P/E multiple of ~27 times on Chatterjee’s calendar 2026 earnings estimate, which embeds upside from a stronger hardware refresh relative to AI iPhones.

The analyst noted that the multiple is justified as it is more in line with the average multiple the shares have traded at in recent years. However, an upside opportunity with a longer AI-led replacement cycle would likely bolster the earnings multiple investors are willing to ascribe.

Apple will likely post strong September quarter results, surpassing consensus estimates. However, guidance for the December quarter may fall slightly short, a trend consistent with Apple’s typical practice of conservative projections.

Chatterjee projects solid iPhone shipments in the September quarter due to a smoother iPhone 16 supply ramp, helping to fill channel inventory before the holiday season.

While iPhone 16 sell-through began slower than last year’s model, recent momentum shows improvement, though volumes remain modestly below previous figures.

The analyst anticipates iPhone revenue in the December quarter to lag behind consensus due to a lower year-over-year volume. However, Apple Intelligence’s release may boost demand, with steady annual iPhone shipments expected to reach 245 million units in 2025.

He revised the estimates for September forecasted revenue of $95.9 billion and EPS of $1.63, with both expected to exceed consensus. In contrast, December’s quarter revenue is projected at $125.9 billion, trailing behind consensus, but EPS is likely meeting expectations due to favorable gross margins.

The company’s recent developments and the anticipated AI-led iPhone upgrade cycle keep the analyst’s December 2025 price target unchanged.

Price Action: AAPL stock is up 1.42% at $234.69 at last check Monday.

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Photo courtesy of Apple