In a note to clients, analysts wrote that they now expected Apple to report iPhone revenue of US$199.7 billion in 2023 and US$221.1 billion in 2024, compared to its previous expectations of US$206 billion and US$235.2 billion respectively.
As such, their full year 2023 earnings per share estimates were lowered from US$5.82 to US$5.73, while full year 2024 went to US$6.53 from US$6.87.
They noted that while most of the lost December quarter sales would slide into March as availability improves, they do anticipate lost sales during the holiday season.
“With COVID-19 restrictions adversely impacting the iPhone 14 Pro and Pro Max assembly in China, we anticipate demand will outstrip supply into the March quarter,” Canaccord analysts wrote.
However, the analysts also reiterated their ‘Buy’ rating for the stock and their US$200 price target remained unchanged.
“With the 5G upgrade cycle likely a benefit for the next several years, other hardware categories growing nicely with a strong mix of new subscribers, and a continued mix shift toward high-margin services, we reiterate our ‘Buy’ rating and $200 price target despite our slightly lowered estimates,” they wrote.
“Apple’s ecosystem approach, including an installed base that exceeds 1.8 billion devices globally with over 1 billion iPhone users, should continue to generate strong services revenue longer term, and we expect the higher-margin services revenue growth to outpace total company growth and drive gross margin expansion.”