This article first appeared on GuruFocus.
Apple (AAPL, Financials), the consumer technology company behind the iPhone, Mac and Services ecosystem, remained a Buy at Bank of America ahead of its fiscal third-quarter results.
Analyst Wamsi Mohan kept a $380 price target and said Apple could beat Wall Street expectations for the June quarter.
BofA forecasts revenue of $109 billion and earnings of $1.89 a share, slightly above consensus estimates of $108 billion and $1.87.
The firm expects revenue to rise 16% from a year earlier, near the top end of Apple’s guidance.
Services revenue is projected to grow 14%, supported by iCloud and licensing income, including Apple’s search agreement with Google.
BofA also expects June-quarter gross margin of 48.2%.
Product margins could weaken in the June and September quarters because of higher component costs, product mix and a staggered iPhone launch.
The firm views that pressure as temporary and expects product margins to recover in the December quarter as higher-priced iPhones reach the market.
Shares fell 2.8% in late morning trading.
Attention now turns to Apple’s earnings call, where investors will look for updates on iPhone demand, Services growth and the company’s leadership transition.
