When Apple Inc. (NASDAQ: AAPL) reports fiscal first-quarter earnings after markets close Wednesday, analysts are expecting to see year-over-year revenue growth of around 15% and earnings per share (EPS) growth of about 13%. Those estimates could be on the low side.
The late launch of the new iPhones (and the resultant loss of revenue) was partially offset by demand for the company’s iPad and Mac products, as more people were working or going to school from home. For the rest of the 2021 fiscal year (ending in September), demand for the new 5G iPhones is likely to strengthen as telecom providers roll out the high-speed service to more customers.
The projections for the 2021 and 2022 fiscal years don’t appear to bode well for Apple. While 2021 revenue is expected to improve by about 16%, the revenue projection for 2022 calls for an improvement of just under 5%. EPS in 2021 are forecast to improve by some 22%, given the successful introduction of the new iPhones, but the projection for 2022 calls for a rise of only around 8%.
The consensus 12-month price target on the stock is $135, and shares closed at $139.07 on Friday. The high target is $160, implying a potential upside in the share price of 15%. Apple shares added more than 80% in 2020. Loup Ventures analysts Gene Munster and David Stokman predict Apple’s share price will reach $200 (a potential upside of some 44%) over the next couple of years using their estimated multiple of 35 times 2022 EPS of $5.70. That is much higher than the average estimate for 2022 EPS of around $4.35.
One thing that will drive Apple’s earnings and share price will be the next version of the iPhone. While the launch of the iPhone 13 is months away, that doesn’t mean that rumors are not already flying about Apple’s next smartphone.
Apple is expected to continue offering four iPhone models: the 5.4-inch iPhone mini, the 6.1-inch lower-cost iPhone and two iPhone Pro models in 6.1-inch and 6.7-inch variations. One long-time Apple analyst, Ming-Chi Kuo, suggested nearly two years ago that a high-end iPhone would be completely wireless by 2021 (i.e., no Lightning port). MacRumors notes another rumor that the company will adopt a Smart Connector, eliminating the need for the Lightning port.
Another rumor has Apple removing (or reducing the size of) the notch at the top of the display that currently accommodates the rear-facing camera. Apple is also said to be testing an in-screen Touch ID fingerprint reader that would be available along with the Face ID system.
Apple also may include a lidar scanner, currently available in the Pro Models in the lower-priced phones, thus extending augmented reality technology to all new iPhones.
And don’t forget about a rumored Apple car. Although no one expects to see an all-electric, autonomous vehicle from Apple until at least 2024, an announcement that the company is working on such a vehicle is possible at any time.