Apple: Updating Estimates for Price Elasticity; Expect More Resilience in Revenue/EPS Outlook than Feared by Investors

Research evidence excerpt

Apple: Updating Estimates for Price Elasticity; Expect More Resilience in Revenue/EPS Outlook than Feared by Investors

t revenue mashu.nishi@jpmorgan.com

headwinds when incorporating the higher ASPs; and 5) relatively favorable access J.P. Morgan Securities LLC

to memory and lower-than-market price increases, particularly in relation to

iPhones, where our base-case is now for a $100 price increase (vs. $50 prior), Quarterly Forecasts (FYE Sep)

supports continued opportunity for share gains across all product lines including Adj. EPS ($)

iPhones. Reflecting our updated views on price elasticity in our model leads to 2025A 2026E 2027E

largely unchanged FY27E earnings estimate of $9.85, contrary to investor fears Q1 2.40 2.84A 3.12

Q2 1.65 2.01A 2.30

around downward revisions; we are establishing a Dec-27 price target of $345 (vs. Q3 1.57 1.93 2.07

Dec-26 price target of $325) with the opportunity for AAPL shares to trade higher Q4 1.85 2.07 2.37

than the 32x target multiple with earnings resilience positively surprising more FY 7.46 8.85 9.85

concerned investors.

Style Exposure

• Price elasticity remains a watchpoint across devices, but long-term trends

suggest that pricing has limited implications on volume opportunity over

a multi-year period. We do not underestimate the near-term influence on

volumes from pricing actions, but it is important at the same time, to keep in

mind that long-term historical trends bear evidence to limited impact of pricing

on volumes over a multi-year period. For example, Apple has taken meaningful

pricing across the portfolio in the past, and volumes have continued to expand

despite those price increases, as well as despite a mature and stagnant

underlying market volume backdrop in relation to all three primary product