Morningstar Trims Apple's Fair Value Estimate Amid Supply Constraints
Apple's fiscal third-quarter earnings report was released on July 30, and Morningstar has taken a closer look at the results. The company saw strong growth in revenue, with total income rising by 16% year-over-year to $109.4 billion. iPhone revenue grew even faster, increasing by 22% over the same period.
Morningstar's analysis notes that supply constraints and memory inflation will weigh on Apple's results through 2027, but recent pricing increases are expected to help mitigate these effects. The firm models a growth headwind of about 3% in the September quarter and fiscal 2027 due to tight global chip supply amid demand for artificial intelligence.
In terms of valuation, Morningstar trims its fair value estimate for Apple to $285 from $290 to reflect short-term supply constraints and memory cost pressures. The firm still expects double-digit growth in 2027, led by pricing increases, which will partially offset memory inflation.