Apple’s first product event under John Ternus just wrapped up. Wall Street has a verdict. The products impressed. The pricing did not land where analysts expected.
Bank of America’s Wamsi Mohan had to update his model to reflect both. The result is a price target that moved lower on a day when Apple launched something genuinely new.
BofA reiterates Buy and trims Apple price target to $370
In a note shared with TheStreet, Mohan reiterated his Buy rating on Apple and cut his price objective to $370 from $380. The new iPhones priced below his expectations, putting pressure on gross margin assumptions in a market where memory and component costs remain elevated.
The valuation multiple stays at 37 times calendar 2027 earnings. That part did not change.
Mohan said Ternus delivered on expectations for his first major launch as CEO. The new CEO kept the focus on Apple’s core values. Privacy. Tight integration of hardware and software. AI that runs on the device rather than routing personal data through external servers.
Mohan wrote in the note that he sees Siri becoming more capable and personalized over time while continuing to protect user data. Ternus described the iPhone as an “intelligent personal hub” that can understand personal context, with AI unlocking a new level of capabilities.
iPhone Duo is Apple’s first foldable and Mohan’s biggest highlight
The iPhone Duo is Apple’s first foldable phone. Mohan called it the standout of the entire event.
When open, the inner display measures 7.6 inches. When closed, the outer display is 5.4 inches. Both support Dynamic Island, always-on functionality, and ProMotion adaptive refresh up to 120Hz.
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The device runs on Apple’s A20 Pro chip, weighs 254 grams, and carries an IP68 water-resistance rating. Pre-orders open Oct. 16. The Duo goes on sale Oct. 23, starting at $1,999. Apple Pencil support is coming later in the year, MacRumors reported.
Mohan’s view is that the foldable form factor can move into the mainstream over time. He pointed to dual capture in FaceTime and apps built specifically for the larger display as reasons the Duo could reach a broader audience. If it does, it gives Apple a new growth engine outside the standard annual upgrade cycle.
Citi separately called the iPhone Duo Apple’s biggest new hardware category since the Watch and AirPods.
Lower iPhone pricing raises units but pressures margins
The iPhone 18 Pro starts at $1,199 and the Pro Max at $1,299. Both are $100 above last year’s equivalents. The issue is that Mohan had expected even higher average selling prices going in.
The gap between his model and reality is what drove the earnings estimate cuts and the lower price target.
Mohan raised his iPhone unit estimates for fiscal 2026 and fiscal 2027 to reflect expected stronger demand from the more accessible pricing. But lower average selling prices squeeze what lands on the bottom line even as unit volumes improve. His calendar 2027 EPS estimate fell to $9.98 from $10.32 as a result.
Apple is still absorbing elevated component costs. Tim Cook described the memory crunch as a hundred-year flood in his final months as CEO. Choosing to price more aggressively on the new iPhones is a volume bet, not a margin bet.
J2R / Getty Images
iPhone 18 Pro Watch Series 12 and AirPods 5 also impressed
The iPhone 18 Pro and Pro Max both received positive reviews. Both use the A20 Pro chip on a 2nm process. The main camera adds a variable aperture with six laser-cut aperture blades. Battery life on the Pro Max extends to 45 hours of video playback, CNBC reported.
Watch Series 12 takes heart rate readings every five seconds. That is 60 times more frequently than the prior generation. It also produces a daily readiness score.
The Ultra 4 adds built-in satellite connectivity and up to 50 hours of battery life. AirPods 5 arrive with active noise cancellation, real-time translation, and a new multiport acoustic design. They start at $129.
What Bank of America’s call means for Apple investors
The $370 price target implies roughly 17% upside from where Apple traded on Sept. 9. Mohan is not walking away from the stock. He is recalibrating around a launch that delivered something genuinely new while pricing the standard iPhone lineup below his model.
His Buy rating rests on several pillars: strong iPhone upgrade demand driven by AI hardware requirements, continued services revenue growth, higher margins from internally developed silicon, and continuing capital returns.
The Duo does not change any of those. It adds a new one.
The question heading into the holiday quarter is whether the foldable form factor finds mainstream traction or stays a premium curiosity. The Oct. 23 launch date gives investors their first real look at whether the demand is there, according to CNBC.
Related: AT&T CEO drops 4-word verdict on new Apple iPhone Duo
