Bank of America Reiterates Buy on Apple Stock Ahead of Q3 Earnings and CEO Transition
Bank of America has reiterated its buy rating and $380 price target on Apple stock ahead of the company's fiscal third-quarter earnings report on July 30, which will be Tim Cook's last earnings call as CEO before John Ternus takes over. Analyst Wamsi Mohan models Q3 revenue of $109 billion and EPS of $1.89, slightly above consensus, driven by over 20% year-over-year iPhone revenue growth and double-digit Services growth. However, the bank warns of near-term gross margin pressure from elevated memory chip costs, with product margins expected to drop 190 basis points in Q3 and another 280 basis points in Q4. A key operational change flagged is Apple's staggered iPhone launch: the Pro, Pro Max, and foldable models will launch in September, while the standard iPhone and iPhone Air are delayed to March 2027, shifting seasonal revenue patterns. Services margins remain strong at around 76.5%, though App Store growth slowed to 3.2% year-over-year.
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