Apple Inc (NASDAQ:AAPL, XETRA:APC) is likely to deliver a stronger-than-expected start to fiscal 2026 as resilient iPhone demand and pricing power help offset rising component costs, analysts at Jefferies believe.
Jefferies analysts see Apple’s first-quarter fiscal 2026 results beating consensus forecasts, citing solid iPhone sales momentum and the company’s ability to absorb higher memory and chip costs through higher average selling prices (ASPs).
The firm said Apple is “highly resilient” to sharp increases in memory costs because those costs account for a relatively small portion of iPhone ASPs. Even if memory costs were to rise by about 80% in 2026, Jefferies estimates the impact would amount to roughly $20 per device, which Apple could offset through modest price increases.
Jefferies has assumed a $100 ASP increase for higher-end iPhone 18 Pro and Pro Max models to cover rising bills of materials, including higher system-on-chip costs linked to Apple’s transition from 3-nanometre to 2-nanometre technology and the adoption of advanced packaging. The firm noted that iPhone pricing has been largely unchanged over the past three years, suggesting such an increase would be unlikely to dent revenue.
The brokerage also pointed to signs of “pulled-in” consumer demand, as buyers move earlier amid concerns about future price hikes. That dynamic, it said, is helping sustain strong sales of the iPhone 17 lineup, particularly the base model.
Industry checks cited by Jefferies show iPhone sales in China grew more than 40% year-on-year in November, driven largely by the iPhone 17 series. As a result, the firm raised its first-quarter fiscal 2026 iPhone unit forecast by 7% to 86.9 million units, representing 18% growth year-on-year. Combined with an estimated 2% rise in ASPs, Jefferies expects iPhone revenue growth of about 15% for the quarter.
Jefferies now forecasts Apple’s first-quarter fiscal 2026 earnings per share to grow about 15%, roughly 6% above consensus. For fiscal 2026 and 2027, it projects revenue growth of 9% and 7%, respectively, with EPS growth of 12% and 10%.
Looking further out, Jefferies expects iPhone unit growth to slow as product launch timing shifts, forecasting unit growth of 4.7% in fiscal 2026 and a 2.5% decline in fiscal 2027. However, it said higher ASPs, a potential foldable iPhone from fiscal 2027, and a possible 20th anniversary model could help support margins and earnings despite softer volumes.
Despite raising its discounted cash flow valuation and lifting its target price, Jefferies kept its Hold rating, arguing that Apple’s valuation remains demanding. The stock trades at about 33 times forecast fiscal 2026 earnings, which the firm said limits upside even as fundamentals continue to improve.
The brokerage raised its price target by 15% to $283.36, reflecting higher earnings forecasts and a higher long-term growth assumption.