Apple rises even as Morgan Stanley says Mac, Services weakness could hit June quarter
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Apple (NASDAQ:AAPL) shares edged upward Wednesday even as Morgan Stanley analyst Katy Huberty said that potential weakness in the company's Mac and services segments could more than offset "solid iPhone results."
Huberty, who rates Apple (AAPL) shares overweight, estimated that the company will report fiscal third-quarter revenue of $80.6B, down 1.1% from a year ago. Apple's (AAPL) results are set to include a 1% impact from the company exiting Russia, a roughly 5% year-over-year impact from foreign exchange headwinds and the potential for iPad, Mac and services sales to be lower. Huberty also forecast Apple (AAPL) to earn $1.10 a share and report gross margins of 42.4%.
Huberty now expects Apple to have shipped 5.6M Macs during the quarter, compared to estimates of 6.2M, based on the mid-point of IDC and Gartner's preliminary second-quarter estimates. She also lowered services growth by 0.2% to be $19.49B, up 11.5% year-over-year. 
She boosted the average selling price on 46M iPhones to be $813, while also noting iPad shipments may be 12M during the quarter.
"Based on supply chain checks, iPad and Mac were the two products most impacted by the COVID-driven lockdowns in China," Huberty said. "And we forecast sub seasonal performance for each segment."
Huberty said that she expects Apple's (AAPL) June quarter iPad sales to be down by 7%, and Mac sales to decline by 26% from the quarter that ended in March. 
In addition, Huberty noted that investors will be looking to the impact of foreign exchange headwinds and any signs of a demand slowdown for the iPhone 14 in the September quarter.
"We see potential for more guarded September [quarter] commentary, but view [Apple] as a high quality name to buy on pullbacks," Huberty added.
Huberty trimmed her price target on Apple's (AAPL) stock to $180 a share from $185. 
Apple (AAPL) is slowing down hiring in parts of the company as the economy looks to soften heading into the rest of the year and 2023.