JPMorgan believes Apple will beat earnings expectations in its quarterly report later this month and forecast a strong current-quarter performance, sending shares higher. Apple is set to report its fiscal year 2022 first-quarter earnings on Jan. 27. The stock is down more than 2% this year amid a tech selloff, but Apple outperformed the market in 2021 with a 33.8% return. "We expect the upcoming earnings print for Dec-Q (F1Q) to feature some of the headwinds from the slow supply chain ramp in relation to new products, which will limit the magnitude of upside; although, we expect a modest beat nevertheless, led by better iPhone shipments," JPMorgan's Samik Chatterjee said in a note Thursday. "That said, we expect the bigger driver of the earnings upgrade cycle to be F2Q (March-end) revenue/EPS expectations," Chatterjee added. Production disruptions due to Covid outbreaks have impacted companies across industries in the past year, but JPMorgan sees supply recovering for Apple in the fiscal second quarter. Improved supply and persistently strong demand should lead to above-seasonal iPhone revenue, JPMorgan said. The firm expects Apple to ship 61 million iPhones in the fiscal second quarter, translating to $49.2 billion of sales. While JPMorgan says Apple shares are not cheap relative earnings, the firm believes the company's positive outlook for the year should keep investors happy. "We believe investors will continue to justify the premium earnings multiple (30x) on expectations of further earnings upgrades, driving the shares higher with the positive outcome from a combination of a modest F1Q beat and a better outlook," Chatterjee said. —CNBC's Michael Bloom contributed reporting.
The Apple logo is seen on a window of the company's store in Bangkok on February 14, 2021.
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JPMorgan believes Apple will beat earnings expectations in its quarterly report later this month and forecast a strong current-quarter performance, sending shares higher.