The stock needs near-12% sales growth and a still-rich multiple. I model 8% growth, 48.5% gross margin and 32 times FY27 earnings, which points to $316.
Key points
- $336.58 requires about 34 times my FY27 EPS of $9.88, or roughly 12% sales growth at today's margin.
- 8% is my FY27 revenue growth: iPhone mix and services help, memory inflation and chip limits do not.
- 32 times FY27 earnings is the multiple I apply, below the 37 times on this year's $8.97.
The call
The price requires mid-teens hardware growth to persist and the multiple to stay above 34 times next year's earnings. That is too optimistic given guided Q4 gross margin of 47, 48% after refunds fade and memory costs rise.
I expect FY26 sales of $477 billion and FY27 of $515 billion, with gross margin settling near 48.5%. Buybacks cut shares to 14.2 billion. That produces $9.88 of FY27 EPS. At 32 times, the stock is $316 in twelve months. The market is too optimistic.
Revenue by quarter ($ billions)SEC XBRL through June 2026; FY26 Q4E and FY27E are the author's
Valuation
| Item | Figure |
|---|
| FY26E revenue | $477 billion |
| FY27E revenue | $515 billion |
| FY27E EPS | $9.88 |
| Multiple | 32 times |
| 12-month target | $316 |
Thirty-two times is still a premium to a hardware cycle with rising memory and AI opex. Upside if Duo and Siri paid access surprise is maybe 15%; downside if China or margins slip is similar, so a hold.
Gross margin %Company filings; Q4 FY26E is the author's 47.5% guided band
Risks
- Advanced-node supply stays tight into calendar 2027, capping iPhone units; watch Q4 commentary.
- Memory inflation lasts longer than inventory hedges; watch gross margin excluding refunds.
- EU commission cuts or China demand fade; watch Services sequential growth and Greater China sales.
What would change my mind
A clean Q4 print with gross margin above 48% excluding refunds and Duo unit commentary that supports double-digit FY27 growth.