Apple Inc. is seeing “stable to improving” trends in its iPhone and services businesses that could help make up for less rosy performance elsewhere, according to a BofA Securities analyst.
Wamsi Mohan boosted his price objective on Apple
AAPL,
shares to $168 from $158 Wednesday, writing that the trends in iPhones and services “drive upside to margins.”
“Although Macs and iPads have trended worse, the highest margin parts of the portfolio will likely keep gross margins stable,” Mohan wrote.
Still, he kept a neutral rating on Apple’s stock, writing that while the stock has “positive catalysts” ahead in the expected launch of a mixed-reality headset, that benefit could be “offset by a potentially weaker consumer spending environment” in the second half of the year.
Read: Apple sets date for WWDC event where it could unveil its new headset
See also: This is one important lesson Tim Cook learned from Apple founder Steve Jobs
Jefferies analyst Kyle McNealy, meanwhile, noted that while unit-sales trends don’t seem particularly spectacular, the company’s results could still get a lift from average selling prices.
“Our analysis of web traffic globally indicates that Apple saw some deceleration in February with unit trends now tracking in-line with expectations for the quarter versus previously [being] ahead,” McNealy wrote, while noting that “March quarterly trends” were “more in-line from a units perspective.”
Average selling prices, though, could benefit from not only “the mix shift to Pro models but also to higher memory configurations,” he said, adding that higher international pricing could help as well.
Apple is due to report fiscal second-quarter results after the closing bell May 4.
This post was originally published on Market Watch
