Bernstein analyst Toni Sacconaghi wrote in a research note on Tuesday that while Apple’s revenue has declined in the latest few quarters when compared with 2022, gross margins continue to expand.
“Fundamentally, it has been an improvement in product gross margins which have grown an average of ~170 bps per year since 2020, vs. declining ~140 bps per year between 2015 and 2020,” Sacconaghi said, referring to basis points, or hundredths of a percentage point. He has a Market Perform rating on the stock and a target of $195 for the price.
According to FactSet, Apple’s gross margins were about flat year over year from 2015 to 2020, but have increased every year from 2020 to the present. Current gross margins are 44.1%.