On Thursday, Goldman Sachs (NYSE:GS) adjusted its price target on Apple stock, bringing it down to $280 from the previous $286, while maintaining a Buy rating. The firm's analyst, Michael Ng, provided insights into Apple's financial expectations, predicting that the company would achieve earnings per share (EPS) of $2.35 for the first quarter of fiscal year 2025, aligning with the FactSet consensus. Revenue forecasts were slightly below consensus, with Goldman Sachs expecting $124.2 billion compared to the consensus estimate of $124.8 billion. According to InvestingPro data, Apple currently trades at a P/E ratio of 36.48, suggesting a premium valuation, with analyst price targets ranging from $183 to $325.
The report highlighted a modest year-over-year increase of 1% in iPhone revenue for the first fiscal quarter, despite a predicted 4% decline in shipments, which is consistent with data from IDC. This decline is anticipated to be compensated by a 5% growth in the average selling price (ASP) of iPhones. While competition within the Chinese smartphone market has ramped up, Goldman Sachs sees potential for accelerated iPhone growth in fiscal year 2026 due to anticipated innovation for the iPhone 17/18 series and the expansion of Apple Intelligence features in new markets. InvestingPro analysis shows Apple maintains strong financial health with a 46.21% gross profit margin and revenue growth forecast of 6% for FY2025.
The analyst noted the impressive growth in Apple's services sector, with App Store spending expected to rise by 15% in the first fiscal quarter of 2025. The continued adoption of Apple's services is projected to contribute to a sustained double-digit growth in this area. Despite these positive forecasts, Apple shares (NASDAQ:AAPL) have experienced a decline of 11% year-to-date as of January 22, 2025, marking a potential for the worst monthly performance since December 2022. This downturn follows a period of strong performance in the latter part of 2024.
Looking forward, Goldman Sachs anticipates an improvement in market sentiment for Apple stock around the middle of the year, a typically strong season for the company. Concerns regarding the limited impact of Apple Intelligence on iPhone demand and the competitive pressures in China are expected to shift focus to the unveiling of new Apple Intelligence features at the Worldwide Developers Conference (WWDC) 2025, the introduction of new Mac, iPad, and iPhone SE products in Spring 2025, and the potential for innovative features for the iPhone 17/18 slated for release in Fall 2025 and 2026. With Apple's next earnings report due on January 30, 2025, InvestingPro subscribers can access comprehensive analysis, including 13+ additional ProTips and detailed financial metrics, to make informed investment decisions.
In other recent news, Wedbush maintains an Outperform rating for Apple Inc. despite market volatility, with a target price of $324.00. The firm's confidence is bolstered by Apple's strong fundamentals, including $391.04B in revenue. However, Jefferies and Loop Capital analysts recently downgraded Apple due to concerns over its earnings and revenue guidance targets, partially attributed to slower than expected demand for artificial intelligence technologies in its products.
On the competitive front, Samsung Electronics (KS:005930) is preparing to launch an ultrathin version of its Galaxy S25 phone, known as the Galaxy S25 Edge. This move is seen as a direct challenge to Apple, which is also expected to unveil an ultra-thin iPhone later this year.
In other company developments, Meta Platforms (NASDAQ:META) is expanding its wearable technology market footprint, with plans to launch Oakley-branded smart glasses and other AI wearables. This commitment to augmented reality and AI-driven features positions Meta as a significant player in the tech industry.
Meanwhile, Nvidia (NASDAQ:NVDA) has reclaimed its title as the world's most valuable publicly-traded company, surpassing Apple. This achievement is attributed to the robust demand for Nvidia's artificial intelligence chips, which has driven significant growth in the company's shares. These developments highlight the dynamic landscape of the tech industry, with companies like Samsung, Meta, and Nvidia making significant strides.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.