Tech giant Apple (AAPL) remains a core long-term holding at Morgan Stanley, but the firm is urging some caution ahead of its Q1 FY26 earnings, scheduled for January 29. In a new note, top Morgan Stanley analyst Erik Woodring reiterated an Overweight rating on Apple and kept his $315 price target, even as he warned the stock could face near-term pressure.
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Wall Street expects Apple to report earnings per share (EPS) of $2.67 on revenue of $138.38 billion for the quarter. Woodring said Apple shares may trade flat or slightly lower after earnings, despite stronger-than-expected iPhone demand.
Why Morgan Stanley Still Likes Apple Stock
Woodring said Apple’s iPhone business looks stronger than many investors expect. He expects iPhone revenue to come in 4% to 8% above Wall Street estimates in the December and March quarters, as demand for the latest iPhone cycle remains solid and is not yet fully reflected in the stock price.
This supports his positive long-term view on Apple shares.
Costs Could Weigh on Earnings Reaction
Even so, Woodring said higher costs could limit upside after earnings. He noted that Wall Street estimates for operating expenses in the March quarter appear too low. At the same time, he expects gross margins to come in slightly below consensus.
Because of this, Apple may see limited improvement in earnings forecasts, even if revenue comes in above expectations.
Looking ahead, the analyst also sees risk to June quarter earnings. He expects results to fall short of Wall Street estimates, mainly due to rising memory costs.
Is AAPL Stock a Buy or Sell Right Now?
Heading into Q1 FY26 earnings, Wall Street has a Moderate Buy consensus rating on Apple stock based on 19 Buys, 11 Holds, and two Sell recommendations. The average AAPL stock price target of $298.49 indicates 20.3% upside potential. AAPL stock is down about 9% year-to-date.
