Apple (AAPL) shares are likely to trade down after its fiscal Q1 earnings report as estimates for fiscal 2024 and 2025 are expected to be revised, UBS said in a report sent Friday.
The firm projects H1 iPhone shipments of 128 million units, compared with the project of about 128.5 million units a year earlier.
The investment firm expects roughly 4% revenue growth in fiscal 2024 and 3% growth in fiscal 2025, compared to the consensus of 4% and 6%, respectively. The “iPhone still comprises roughly 50% of total revenue dampening growth of services that should account for 24% of the mix,” UBS analysts said.
The iPhone sales are taking a hit from competition in China, it said.
“At an average [average selling price] of roughly $900, lost share in China could pressure iPhone revenue by slightly more than
$7 billion, a 3.5% iPhone revenue headwind and [around] 1.9% total company headwind,” the analysts said.
UBS has a neutral rating on the stock with price target of $190.