Bank of America expects Apple to report results for the March quarter that exceed market forecasts, citing robust iPhone sales and continued strength in the companys high-margin Services business.
Analyst Wamsi Mohan said BofA models "revenues above guidance for the March quarter," and sees "upside to Street estimates given continued strong sales of iPhone, double-digit growth in Services revs and benefit from FX."
On the numbers, BofA projects revenue of $113 billion and earnings per share of $2.00 for the quarter, ahead of consensus estimates of $109 billion in revenue and $1.93 in EPS.
iPhone demand is a focal point for the banks optimism. BofA raised its unit forecast to 60 million iPhones for the quarter, attributing the increase to what it describes as "strong demand for iPhone 17." Alongside handset strength, the firm expects Services revenue to remain a growth engine, modeling a 14% year-on-year increase, consistent with recent trends even as App Store sales have softened.
Looking forward, Bank of America anticipates Apple will guide toward continued expansion, forecasting June-quarter revenue growth in a 10-15% year-over-year range. The bank did caution that product gross margin may compress sequentially, pointing to higher component costs as a source of margin pressure.
BofA also flagged several potential catalysts that could influence investor sentiment: a possible $100 billion buyback authorization, a dividend increase, the June Worldwide Developers Conference, and future product introductions including a foldable iPhone and an "enhanced Siri with integration with Gemini AI."
Maintaining a positive stance on the stock, BofA reiterated its Buy rating and raised its price target on Apple to $325 from $300.
Context and implications
Bank of Americas outlook centers on two revenue pillars for Apple: hardware, led by iPhone unit sales, and recurring revenue from Services. Currency movements are expected to provide a tailwind in the quarter modeled by the bank, while cost pressures in components could weigh on product margins.
What to watch
- Apples reported March-quarter results versus the $113 billion revenue and $2.00 EPS forecast from BofA.
- Guidance for the June quarter, particularly the 10-15% year-over-year revenue growth range projected by BofA.
- Announcements at the June Worldwide Developers Conference and any confirmation of the potential capital return actions referenced by the bank.