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Apple (AAPL) Stock: Analysts Split on Outlook as Earnings Approach Thursday

TLDR

• Apple reports Q1 fiscal 2026 earnings on January 29 with Wall Street expecting $2.67 EPS and $138 billion revenue, both up 11.3% year-over-year
• Analysts rate Apple as Moderate Buy with 19 Buys, 11 Holds, 2 Sells and average price target of $298, suggesting 20% upside despite 8-9% decline this year
• Morgan Stanley reiterates Overweight rating at $315 price target but expects stock to trade sideways to modestly lower after earnings
• KeyBanc maintains Hold rating warning investors may be too optimistic about second-half fiscal year growth and margins
• Morgan Stanley forecasts iPhone revenue 4-8% above consensus but sees risks from higher operating expenses and memory cost headwinds

Apple stock has dropped 8-9% this year heading into its January 29 earnings report. The tech giant faces a divided Wall Street unsure whether current expectations are realistic.

Apple Inc., AAPL

Analysts project earnings per share of $2.67 and revenue of approximately $138 billion for the fiscal 2026 first quarter. Both figures represent 11.3% growth compared to last year. Strong iPhone 17 sales and the high-margin Services business are driving the expected gains.

The company’s shares currently trade well below the average analyst price target of $298. That target implies roughly 20% upside from current levels. Wall Street’s consensus leans toward optimism with 19 Buy ratings, 11 Hold ratings, and just 2 Sell ratings.

Morgan Stanley maintains its bullish stance with an Overweight rating and $315 price target. The firm believes iPhone 17 strength remains underappreciated by most analysts. Morgan Stanley forecasts iPhone revenue running 4-8% above consensus estimates for both the December and March quarters.

But the investment bank tempers its optimism with caution. Morgan Stanley expects Apple stock to trade sideways or modestly lower following the Thursday earnings announcement.

Margin and Cost Concerns Surface

Several factors could prevent positive earnings revisions despite strong iPhone sales. Morgan Stanley points out that consensus estimates underestimate March quarter operating expenses by 7%. The firm also projects gross margins 30 basis points below Street expectations for the same period.

Memory cost headwinds present another risk. Morgan Stanley sees downside to June quarter EPS estimates as intensifying memory costs aren’t fully reflected in current projections.

The firm notes a historical pattern working against Apple. The stock typically underperforms the S&P 500 by a median of 400 basis points during the first calendar quarter.

Mixed Signals From Other Analysts

Goldman Sachs takes a more positive view. The bank reiterated its Buy rating with a $320 price target after Apple’s recent 5% decline. Goldman sees the pullback as a buying opportunity and forecasts 9% iPhone revenue growth in both fiscal 2026 and 2027.

KeyBanc’s Brandon Nispel strikes a middle ground with a Hold rating. While acknowledging healthy near-term iPhone and Mac trends, Nispel warns that investors may be pricing in too much optimism for the second half of the fiscal year. Higher iPhone average selling prices and stronger-than-expected production builds support near-term strength.

UBS maintained its Neutral rating with a $280 price target. The firm estimated unit sell-in for December 2025 reached approximately 84.5-85.0 million units, showing strong demand for the iPhone 17.

Institutional and fund investors dominate Apple’s ownership structure. Vanguard entities rank among the largest shareholders. Public companies and individual investors hold just over 61% of shares.

Apple is also expanding into new products and markets. The company reportedly develops an AI-powered wearable pin featuring multiple cameras, a speaker, microphones, and wireless charging. Talks with Mastercard and Visa continue regarding a potential 2026 launch of Apple’s digital payments service in India.

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