Dollar Weakness, Easing Of Supply Constraints Likely To Add To Better Margins For Apple, Analyst Says - Apple (NASDAQ:AAPL)

Credit Suisse analyst Shannon Cross reiterated Outperform on Apple Inc AAPL with a $184 price target.
Apple will report F1Q23 results after the market on February 2.
The analyst maintained her quarter estimates, including revenue of $121.6 billion and EPS of $1.92, which she lowered on December 9 primarily for iPhone shortages.
Cross saw a potential upside to her estimates below the Street given the weakening of the USD likely to benefit margins given Apple raised pricing in many countries as an offset to the strong dollar.
The analyst treated F1Q22 as a relatively easy comp as quarterly results were constrained by >$6B of backlog, including iPhone, Mac, and iPad.
Cross estimated that currency was a ~7% headwind to Y/Y growth for Products and Services revenue, implying underlying growth closer to 5% Y/Y (Products up 4% Y/Y constant currency and Services up 13% Y/Y constant currency).
The analyst expects challenged iPhone revenue due to well-publicized production challenges at an assembly facility for the iPhone 14 Pro and Pro Max.
However, management had expected silicon shortages to be immaterial for the quarter, so the analyst believed the company could meet the demand for Mac and iPad.
Cross's revised estimates on December 9 included reducing F1Q23 iPhone 14 Pro and Pro Max shipments by 7 million and increasing F2Q23 shipments by 4 million.
When adjusting for supply constraints, Russia's exit, and currency, the analyst estimates revenue growth will decelerate through the year on weaker global consumer spending.
Cross thinks any pressure will be noticeable within Wearables, Home & Accessories and sought comments from management on the call.
Price Action: AAPL shares traded lower by 1.65% at $143.52 on the last check Monday.

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