Apple Q4 Earnings Preview: Goldman Sachs Analyst Expects Significant Overprofits, Resilience in iPhone 16 Demand – Apple (NASDAQ:AAPL)

Goldman Sachs analysts expected fourth-quarter results to beat expectations. apple company AAPL Ahead of its release on October 31st.

Apple analysts say: Analyst Michael Ng reiterated his investment judgment on Apple as a “buy” and kept his price target unchanged at $275.

Earnings preview: Ng is bullish that Apple could beat profit estimates in the near term. The analyst expects earnings of $1.61 per share for the quarter, beating Wall Street’s consensus of $1.57. Ng also forecast revenue of $94.5 billion, beating the consensus of $93.6 billion.

iPhone highlights: Ng cited continued demand for older iPhone models as a positive. He also said that demand for the newly launched iPhone 16 is probably better than originally thought.

The analyst said, “Demand for the iPhone 16 has remained relatively stable year-over-year, and conditions are looking better than feared given more cautious data on lead-time reductions and production cuts year-over-year. “It’s happening,” he said.

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Apple intelligence highlights: Ng sees Apple’s foray into artificial intelligence as a “long-term demand driver.” Apple has chosen to delay the rollout of Apple Intelligence.

“We believe that as we release more features exclusive to the 15 Pro/Pro Max and 16 series, users will be inspired to upgrade their iPhones,” Ng said.

Service highlights: Apple’s strength in services is the basis for Ng’s bullishness on the company.

The analyst acknowledged that product revenue growth has slowed, but argued that the market is underestimating the continued viability of Apple’s ecosystem.

“Apple’s installed base growth, long-term growth in services, and new product innovation are expected to continue to drive product growth, including lower unit demand for iPhones due to longer replacement cycles and lower consumer demand for the PC and tablet categories. That should more than offset any cyclical headwinds to earnings,” Ng said.

The analyst also believes Apple TV+’s apparent decision to shorten its theatrical release window in favor of a quick rollout to streaming is driving subscriptions.

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