Apple (AAPL) is likely to post a slight upside to fiscal Q2 estimates driven by iPhone and Mac demand, with no upside to services segment revenue growth estimates due to muted App Store performance, UBS Securities said in a research note Monday.
Management is also expected to issue a "solid" guidance for the June quarter as elevated memory prices and Apple's ability to secure sufficient supply of silicon is driving smartphone share gains for the iPhone, according to the note.
The brokerage said it expects fiscal Q2 earnings per share of $1.94 on revenue of $109 billion, which already prices in the robust demand for Neo and Mac mini models. For fiscal Q3, UBS said it raised its EPS estimate to $1.70 from $1.59, and its revenue forecast to $102 billion from $98.1 billion. The company is due to report fiscal Q2 results on April 30.
Demand for the Mac portfolio partly driven by initial success of the relatively lower-priced Neo as well as the mini model should drive incremental upside to forecasts, the brokerage said.
UBS Securities boosted its price target to $287 per share from $280 and reiterated its neutral rating on the stock.
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