iPhone demand experiences a "roller coaster," UBS gives Apple a "neutral" rating
UBS released a research report, giving Apple a "Neutral" rating with a target price of $210. iPhone demand experienced significant fluctuations in Q2 2024, with June sales declining 18% year-on-year. It is expected that iPhone shipments in the June quarter of 2025 will be around 45 million units, a year-on-year increase of 3.4%. Although a weak dollar brings slight benefits, UBS lowered its EPS forecast for the September quarter to $1.64, while raising the full-year EPS expectation from $7.13 to $7.15. The EPS expectation for FY 2026 is slightly increased from $7.39 to $7.40, but still below the market consensus of $7.75
According to the Zhitong Finance APP, after experiencing significant demand fluctuations in the second quarter of 2024, UBS released a research report giving Apple (AAPL.US) a "Neutral" rating with a target price of $210.
iPhone demand was notably weak in June, following concerns in the market that iPhone prices might rise due to comprehensive tariffs, leading to significantly higher-than-seasonal advance purchases in April and May. UBS expects that iPhone terminal sales in June will decline by 18% year-on-year. Therefore, the firm estimates that iPhone shipments for the June quarter of 2025 will be approximately 45 million units, a year-on-year increase of 3.4%, which is about 1.5 million units higher than previously estimated.
Additionally, the US dollar remained weak in this quarter, turning the previously expected "slight drag" from exchange rate factors into a "slight benefit." As a result, UBS slightly raised its forecast for the June quarter but lowered its expectations for the September quarter, as iPhone demand may continue to be sluggish and below seasonal levels (affected by prior pull-in).
Due to the early release of iPhone demand in April/May and the decline in June demand, UBS still expects iPhone revenue to be below previous expectations, despite the slight benefit from exchange rate factors. Therefore, as mentioned earlier, the firm has lowered its EPS forecast for the September quarter from $1.68 to $1.64 (the market consensus is $1.67).
For the fiscal year 2025, the firm raised its full-year EPS expectation from $7.13 to $7.15 (the market consensus is $7.16); for the fiscal year 2026, the EPS expectation was slightly raised from $7.39 to $7.40, but significantly lower than the market consensus of $7.75
