The Zhitong Finance App learned that the Bank of America pointed out in its latest research report that as Apple (AAPL.US) adjusts the pace of product launches and stagger the iPhone launch schedule, Wall Street's performance expectations for Apple may have “modelling errors.” Bank of America maintains a “buy” rating for Apple, with a target price of $370.
Bank of America analyst Wamsi Mohan wrote in a report to clients: “Apple will release the results for the fourth quarter of fiscal year 2026 (September quarter) after the US stock market on November 2 (Monday). Investors will focus on component cost inflation, gross margin sustainability, and service business revenue growth.”
He pointed out that since the iPhone adopted a staggered launch strategy (Pro, Pro Max, and Duo released in September, basic models and Air released in March of the following year), and increased sales prices to cope with rising component costs, Bank of America has lowered overall performance expectations. According to Mohan, due to this year's erroneous release, the market's revenue expectations for the December 2026 quarter and gross margin expectations for the March 2027 quarter were too high, while the revenue expectations for the June 2027 quarter were too low (but the gross margin expectations for the same quarter were too high).
Specifically, Bank of America lowered the 2027 iPhone shipment forecast by 9 million units to 247 million units (Wall Street expected 260 million units). Bank of America expects revenue of $113 billion and earnings per share for the fourth quarter of fiscal year 2026 (Wall Street estimates are $114 billion and $1.99, respectively); revenue and earnings per share for the first quarter of fiscal year 2027 are expected to be significantly lower than Wall Street expectations, but given potential tariff refunds and memory inventory conditions, Bank of America's forecast may be conservative, particularly in terms of gross margin.
Mohan believes that the pressure on profit margins is temporary and predicts that gross margin will pick up somewhat from the end of fiscal year 2027 to fiscal year 2028.