JPMorgan expects Apple's profits to rise due to strong iPhone demand. What will the report show?

Apple may beat earnings forecasts in this week's quarterly report thanks to stronger-than-expected demand for the iPhone 17 and lower operating costs, analysts at JPMorgan predicted. The investment bank advised buying the company's shares: it expects them to rise by almost a quarter.

JPMorgan analyst Samik Chatterjee raised the target price of Apple shares from $305 to $315 and reiterated an "Overweight" rating, corresponding to a buy recommendation, CNBC reports. The new target assumes growth of securities by 23% compared to the closing price of trading on January 26. On Monday, the company's securities rose by 3% to $255.4.

Over the past 12 months, Apple's securities have added 11% in value, while the broad market index S&P 500 rose by 13.4%, and the "technology" Nasdaq Composite - by 22%. The lagging quotes, according to Chatterjee, create an attractive entry point for investors.

The company will report its first quarter fiscal 2026 results on Thursday, January 29, and the results could be better than Wall Street's expectations, JPMorgan believes.

JPMorgan estimates that strong demand for the iPhone 17 and lower costs will help Apple beat earnings and revenue expectations. In addition, Chatterjee expects similar dynamics for the current quarter, which will end in March.

"We believe positive signals regarding strong iPhone 17 demand were partially overridden by investor concerns about gross margin pressure due to unprecedented memory price increases, possible price elasticity risks and moderately negative intra-quarter App Store revenue growth data," Chatterjee wrote in a note cited by CNBC.

But the analyst said margin pressure from rising memory prices will become more "limited" and that operating expenses in the fiscal first quarter will be below the company's previously stated guidance.

Chatterjee also notes that Apple shares look attractive ahead of the report, with a price-to-earnings (P/E) ratio of around 30, compared to 32 in previous years - for example, before the launch of the 5G-enabled iPhone.

Most analysts tracking the iPhone maker's securities recommend buying them: the securities have 29 Buy and Overweight ratings versus 18 Hold (advice to hold) and three Sell and Underweight (advice to sell), MarketWatch shows. The Wall Street consensus target price is $292, 14% above the stock's current price target.

This article was AI-translated and verified by a human editor