Apple's EPS Forecast Remains Strong Amid Tariff Concerns

Investors eye Apple's upcoming earnings with estimated EPS up 4.6%. Despite recent tariff tensions impacting stock, analysts maintain a 'Moderate Buy' consensus, showcasing resilience and potential for growth.

Date: 14-04-2025

AI Rating: 7

Market Overview
Apple Inc. continues to solidify its position as a leading technology company with a market cap of $3 trillion. With an upcoming earnings announcement, expectations are high as analysts predict an EPS of $1.60 for the second quarter of 2025, which represents a 4.6% increase from the same quarter last year. This positive trajectory underscores Apple's strong performance in various segments, particularly its high-margin Services offerings and resilient sales of its flagship iPhone amidst challenging economic conditions.

Earnings Per Share (EPS)
The reported EPS from the previous quarter was $2.40, exceeding expectations by 1.7%, built on the foundation of effective cost management and stable sales. Moving forward, the expectation of an EPS of $7.22 for the current year signals a 7% growth from fiscal 2024, with forecasts of an 11.2% increase to $8.03 by fiscal 2026, suggesting robust profitability potential.

Tariff Impact
However, caution surrounds Apple's stock due to concerns about escalating U.S.-China tariff tensions, which have led to speculation about rising production costs and potential impacts on profit margins. Recent drops of over 25% in stock value illustrate investors' reactions to potential manufacturing cost hikes associated with tariffs. Fortunately, the stock rebounded significantly after indications of possible improvements in trade policies, demonstrating market sensitivity to geopolitical developments.

Neutral to Positive Outlook
The stock's overall performance shows a 13.2% increase over the past year, outperforming both the S&P 500 and the Technology Select Sector Fund. Analyst sentiment remains cautiously optimistic, reflected in the “Moderate Buy” rating, with 18 of 36 analysts recommending “Strong Buy.” The average price target of $244.11 provides an estimated 23.2% upside, contributing to a positive outlook for the stock, provided that macroeconomic factors stabilize.

Stocks: AAPL