January 23, 2023

Deutsche Bank trims Apple's 2023 estimates a week ahead of earnings

Deutsche Bank has further trimmed its CY/2023 estimates for Apple (NASDAQ:AAPL) ahead of the iPhone maker’s FQ1 earnings release.

Analysts Sidney Ho and Ross Seymore are taking a more cautious standing on consumer spending in 2023, although they expect the tech firm to beat its estimates for FQ1 since production constraints for the iPhone Pro seem to have improved.

For 2023, they are dialing back demand assumptions and now see Apple’s EPS to settle at $6.30, down from its previous estimates of $6.50. The current consensus estimate is $6.33.

For FQ2, Deutsche Bank now estimates an EPS of $1.42 on revenues of $90B, down from $1.47 and $95B previously. Its price target on Apple has also been lowered from $170 to $160.

The analysts do not expect Apple (AAPL) to provide revenue guidance for FQ2 amid macro uncertainty, but will warn of further deceleration in revenue growth amid continued cautious consumer spending leading to lower iPhone sales.

Loosening restrictions in China could provide a tailwind along with deflationary commodities costs, but the global economic slowdown, increased trade conflicts, FX headwinds and supply-chain disruptions will offset gains according to Deutsche Bank.

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