Apple (NASDAQ:) is ready to report its earnings for the fiscal Q2 2024 on Might 2, and Morgan Stanley analysts count on the iPhone maker will barely prime the consensus estimates.
Nevertheless, they anticipate that the steerage for the June quarter’s income and implied EPS will likely be 4-7% beneath Wall Avenue expectations, “a print we consider this market would punish,” analysts wrote.
Nonetheless, they notice variations from three months prior: Apple’s share value has decreased by 12%, the valuation has dropped by 2.5x turns, and buy-side sentiment and positioning are extra destructive.
Wanting forward, they anticipate that the subsequent main post-earnings catalyst for AAPL will likely be Apple’s Worldwide Developer Convention (WWDC), the place Morgan Stanley expects the corporate to unveil new AI software program developments.
“Consequently, there’s an opportunity Apple might see a aid rally/squeeze greater on a “higher than feared” earnings report/information,” analysts stated in a notice.
“This creates a tough setup, and one we do not consider traders essentially have to step in entrance of,” they added.
However, with a 12% draw back to its bear case valuation and a 30% upside to the brand new value goal of $210, in addition to expectations of an AI-driven iPhone cycle within the fiscal yr 2025, Morgan Stanley stays Chubby ranking on AAPL.