When Apple reports fiscal second-quarter results next Thursday, Wall Street will be looking to gauge the impact of the Trump tariffs on its business. Apple stock rose on Friday.
Analysts say Apple could get a lift in the March quarter from inventory pull-ins and consumers buying ahead of feared tariff-related price hikes. Wall Street is modeling Apple to earn $1.61 a share, up 5% year over year, on revenue of $94.08 billion, up 4%, in fiscal Q2.
Apple's imports from China are now subject to a 20% tariff. The company dodged a 125% reciprocal tariff on Chinese goods when the White House announced an exemption on smartphones, PCs and other electronics on April 11.
Meanwhile, Apple plans to shift more iPhone production to India from China to mitigate risks related to tariffs and geopolitical tensions, Bloomberg and Financial Times reported Friday. Apple hopes to produce all U.S.-sold iPhones in India by the end of 2026, the reports said. Currently Apple sells more than 60 million iPhones a year in the U.S.
Apple wants to double iPhone production in India to more than 80 million units annually. Contract manufacturers Foxconn and Tata Electronics assemble iPhones in India, the reports said.
Wedbush Securities analyst Matt Bryson said the production shift to India is "less than ideal" because the newer Indian factories are less efficient than the Chinese plants. Still, doubling iPhone production in India is possible, he said in a client note Friday.
Apple's guidance for the June quarter and, if given, full year will be closely watched. Analysts will be looking for any signs that the tariffs and possible price increases have caused "demand destruction" among consumers.
For Apple's fiscal third quarter, analysts currently expect earnings of $1.47 a share, up 5% year over year, on sales of $88.96 billion, up 4%.
Apple Stock Gets Price-Target Cuts
On the stock market today, Apple stock rose 0.4% to close at 209.28. Year to date, Apple stock is down 16.4%.
In a negative sign, Apple stock is trading below its 50-day and 200-day moving average lines. Worse still, those lines have formed a "death cross" on its stock chart on IBD MarketSurge. The death cross forms as price action deteriorates and a stock's 50-day moving average crosses below the long-term 200-day moving average.
Three Wall Street firms lowered their price targets on Apple stock this week. On Thursday, UBS cut its price target on Apple to 240 from 250 but kept its buy rating. On Tuesday, Goldman Sachs lowered its price target to 256 from 259 and reiterated its buy rating. Also Tuesday, UBS slashed its price target to 210 from 236 and maintained its neutral rating.
"Indubitably, the biggest concern surrounding the Apple story is the trade war with China," Monness Crespi Hardt analyst Brian White said in a client note Thursday. "Even under the most favorable outcome, we expect Apple's U.S. prices to increase, and manufacturing capacity to continue migrating out of China."
White rates Apple stock as buy with a price target of 260.
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