Evercore ISI has reaffirmed Apple as its preferred pick within the IT Hardware & Networking group following the company's June quarter financial report and accompanying forward guidance. The investment bank maintained an Outperform rating and a $365 price objective.
For the June quarter Apple reported revenue of $109.4 billion and GAAP earnings per share of $1.91, results Evercore noted were largely in line with consensus expectations when excluding tariff benefits. Street estimates were cited at $109.0 billion for revenue and $1.89 for EPS. On a year-over-year basis, Apple registered overall revenue growth of 16%, propelled by a 22% increase in iPhone revenue and a 29% rise in Mac sales, while Services expanded at a more modest 12% pace.
Looking ahead, Apple guided to September quarter sales growth of 9% to 11% and implied EPS of roughly $1.97, guidance Evercore judged to incorporate an element of conservatism.
In its sector note Evercore highlighted four principal areas of focus that influenced its view:
- Supply constraints affecting iPhone shipments, as well as Mac and iPad deliveries, which Evercore expects will act as a roughly 250 basis point headwind in the September quarter, equivalent to about $3.0 billion of sales impact.
- Memory cost movements that reduced gross margins by approximately 120 basis points in the quarter.
- Decelerating Services growth, which slowed to 12% year-over-year, with particular softness observed in App Store gaming-related revenue.
- Continued strength in Greater China, where revenue rose 22% - marking the third straight quarter with growth exceeding 20% and occurring prior to the rollout of Apple Intelligence.
Evercore also outlined a set of upside catalysts it sees as capable of delivering better-than-guided outcomes. Those include the potential commercial and pricing effects tied to the upcoming iPhone 18 launch, incentives and programs that could spur handset upgrades, new Siri AI-capabilities, and a ramp in Services and Wearables later in the year as additional offerings are introduced.
Market reactions among other sell-side analysts were mixed. TD Cowen increased its price target on the stock citing future product pricing considerations, while Goldman Sachs trimmed its target in response to the company’s forward guidance. Meanwhile, KeyBanc maintained an Underweight stance, pointing to valuation concerns.
Evercore’s stance reflects a balance between measurable near-term headwinds and identifiable medium-term catalysts that, in the firm’s view, could unlock upside relative to the current guidance and valuation assumptions.