Apple Inc (NASDAQ:AAPL, XETRA:APC) is set to deliver a fiscal second quarter earnings report driven by continued momentum in iPhone sales and Services growth, prompting Bank of America to lift its price objective on the company to $325 from $320.
“We expect a strong report and guide given ongoing strength in iPhone, Services and benefit from FX,” Bank of America’s analysts wrote in a note.
The analysts also pointed to likely capital return announcements, including a new share buyback authorization and a dividend increase, in line with previous years.
For the fiscal second quarter ending in March, with results due April 30, Bank of America forecasts revenue of $113 billion and earnings per share of $2. That compares with consensus estimates of $109 billion and $1.93.
The firm’s outlook implies about 18% year-over-year revenue growth, above the company’s prior guidance of 13% to 16%, supported by strong device sales and double-digit expansion in Services.
Services revenue is expected to grow 14% from a year earlier, consistent with the prior quarter, even as global App Store growth remains relatively modest. At the same time, analysts raised their estimate for iPhone shipments in the quarter to 60 million units, citing continued demand for newer models.
The bank’s analysts noted that iPhone demand remains strong and flagged potential shifts in product launch timing later this year, including higher-end models and a possible foldable device.
On margins, Bank of America projects gross margin of 48.2% for the March quarter, within company guidance, but expects some pressure in the June quarter due to higher component costs and product mix. Product gross margins are seen declining sequentially, while Services margins are expected to hold steady at around 76%. The firm wrote that cost increases, particularly in memory, could be offset by supply chain efficiencies, a greater mix of premium devices, and potential pricing adjustments.
Looking ahead, Bank of America expects Apple Inc. to guide for June-quarter revenue growth of 10% to 15% year-over-year. It models revenue of $106 billion and earnings per share of $1.82 for the period, both above current market expectations. The firm also anticipates the announcement of a new $100 billion share repurchase program and a dividend increase of about 5%.
The updated $325 price target is based on a 32-times multiple of estimated calendar 2027 earnings.
The ‘Buy’-rated firm traded hands at about $259 on Tuesday afternoon.
Bank of America raised its fiscal 2026 forecasts to $466 billion in revenue and $8.55 in earnings per share, reflecting confidence in sustained growth across hardware and Services, as well as upcoming catalysts including product launches and software updates.
Apple will report its March quarter earnings after the market close on April 30.