Apple (AAPL) PT Raised to $340 at Bernstein SocGen Group

Bernstein SocGen Group analyst Mark C. Newman raised the price target on Apple (NASDAQ: AAPL) to $340.00 (from $325.00) while maintaining a Outperform rating.

The analyst comments: "Apple’s strong iPhone 17 cycle is powering better than expected revenue and profits. Although near term guidance isn’t impacted by rising memory prices, we do see impact coming soon. Apple guided for strength to continue into FQ2, with gross margins guided up slightly to 48.5% in the mid-point. However, we believe rising memory prices will have some impact later this year.

We estimate a 15% increase in iPhone COGS using today’s memory prices, which implies iPhone 18 prices (like-for-like) should be at least 15% more expensive. While we expect Apple will offset this cost inflation through pricing actions, potentially raising prices by a comparable magnitude of +15%, we factor in potential downward mix shift to offset this slightly. We ultimately settled at a net ASP increase of ~12% - pointing to a 150bps iPhone margin erosion. However, we don’t expect the full impact of this to be felt until the first full quarter of iPhone 18 (FQ1’27).

While revenue benefits from higher ASP, we lowered unit growth to account for some modest demand elasticity. This still results in higher revenue estimates. Our margin estimations generally decreased vs. before, except for FY26 gross margin, which is up modestly to 48.2%. Last but not least, our EPS estimates increase slightly across the board, with FY26 and FY27 EPS at $8.72 and $10.35 respectively.

Although much of investors current worries remains stuck on memory price impact on margins and demand, our analysis shows that the impact on EPS should be relatively muted and the upcoming Apple Intelligence release will be the bigger story..."

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