Apple likely to beat revenue estimates this quarter, but June could be cautious, MS warns
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Apple (NASDAQ:AAPL) is likely to beat Wall Street revenue estimates when it reports next week, thanks to strength in the iPhone 13 and Mac, but commentary about the next quarter could be "cautious," Morgan Stanley warned.
Analyst Katy Huberty, who rates Apple overweight with a $210 price target, noted the cautious commentary may stem from China COVID lockdowns, but any weakness should be bought ahead of product launches later this year.
"We expect Apple to post upside to March quarter consensus revenue estimates on the back of iPhone 13 and Mac strength, which we believe more than offset relative weakness in iPad and the App Store in the quarter," Huberty wrote in a note to clients.
Apple (AAPL) shares rose nearly 1% to $168.67 in early trading on Wednesday.
However, Huberty cautioned that COVID-related lockdowns in major China manufacturing hubs, such as Shanghai, Kunshan, and Zhengzhou, could cause Apple (AAPL) to "take a more cautious stance when providing commentary on the June quarter given the unpredictable nature of potential future lockdowns." 
It's likely that Apple (AAPL) would be directionally cautious with its commentary for the next quarter, taking into account lower factory production and recent iPhone SE order cuts, Huberty explained.
Huberty also said she expects Apple to announce an $80 billion buyback and a 7% increase to its dividend when it reports.
"When combined with [free cash flow] generation that we expect to grow 13% Y/Y in FY22, we have Apple reaching $68B of net cash by fiscal year end, up $2B [year-over-year], implying Apple has a multi-year long runway ahead to sustain elevated shareholder returns before approaching its net cash neutral target." 
Looking ahead, Huberty said the iPhone 14 launch in the fall and a release of augmented and virtual reality glasses, likely in early 2023, are "key catalysts to help drive a re-rating" in the stock.
On Tuesday, Rosenblatt Securities analyst Barton Crockett started coverage on Apple (AAPL) with a neutral rating and a $184 price target, noting it is facing several obstacles coming from China.