Investing.com -- JPMorgan analysts expect Apple (NASDAQ:AAPL) to deliver strong fourth-quarter earnings but caution that the company may provide weaker-than-expected guidance for the upcoming holiday quarter.
This dynamic reflects "a balance of better-than-expected Sep-Q (F4Q) results" and the potential for a "shortfall" in first-quarter fiscal 2025 (F1Q25) guidance.
The analysts noted that iPhone 16 shipments benefited from "a smooth supply ramp" during the September quarter as Apple filled inventory channels ahead of the holiday season.
However, they add that the initial sell-through for the iPhone 16 series started off slower than its predecessor, the iPhone 15.
While demand has improved in recent weeks, the volume remains "modestly below last year," according to JPMorgan (NYSE:JPM).
Given this slower-than-expected momentum, the bank predicts Apple's iPhone revenues for F1Q25 will "track below consensus," though they still expect revenue growth year-over-year, driven by "Price/Mix" improvements.
The analysts believe that Apple's AI-driven upgrade cycle—fueled by the upcoming "Apple Intelligence" feature—will play a crucial role in boosting consumer demand over the course of 2025.
"We expect our unchanged volume forecast of 245 million iPhone units in 2025E" to lead to revenue growth above consensus levels by the second and third quarters of 2025, the analysts stated.
The outlook underscores JPMorgan's confidence in Apple's long-term strategy despite potential near-term headwinds.
JPMorgan has adjusted its estimates ahead of the earnings report, raising its forecast for F4Q24 revenue but lowering projections for F1Q25. The analysts also highlighted that Apple's gross margins, driven by favorable product mix early in the upgrade cycle, are likely to come in better than consensus expectations.
The investment bank maintains its December 2025 price target of $265 and its Overweight rating on Apple, pointing to the company's potential for sustained growth as it rolls out new technologies.