Investing.com -- Oppenheimer reiterated its Perform rating on Apple in a note on Monday ahead of the company's fiscal fourth-quarter results, warning that the stock's premium valuation leaves little room for disappointment.
Analyst Martin Yang forecasts fiscal fourth-quarter revenue of $112.9 billion and EPS of $1.96, slightly below the consensus of $113.4 billion and $1.99.
However, he said the bigger debate is the fiscal 2027 earnings outlook. His 2027 EPS estimate of $8.91 is about 7% below consensus.
Yang stated that slowing iPhone growth, Services headwinds, and memory cost inflation are likely to constrain upside. He noted that Apple trades near the top of its 15-year forward P/E range.
"The valuation already demands more durable growth than we underwrite," Yang wrote.
He said seven of nine sources in Oppenheimer's review sample advised owners to hold off on upgrading to the new Pro models. Counterpoint data showed Pro-series sell-through up 3.1% globally in the first three weeks, but down 4% in the U.S. and 27% in Japan.
"We see limited evidence of a broad replacement-cycle acceleration," the analyst said.
Oppenheimer forecasts 5 million to 6 million iPhone Duo shipments in 2026 and 15 million to 20 million in fiscal 2027, supporting 6% iPhone revenue growth. However, Yang warned the device could cannibalize Pro and Pro Max sales.
The firm also models a 150 basis point hit to products gross margin in the December quarter from higher DRAM and NAND costs. It sees Services reacceleration as unlikely due to slow App Store growth, regulatory pressure, and slowing Google search growth.
Original Article
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