Bank of America analysts suggest that Apple (AAPL) may have to raise its prices amid a potential financial impact from potential tariffs. Indeed, BofA estimates that a 10% tariff on all Apple products imported into the U.S. would result in a 2% to 3% decline in earnings per share. Apple would have to raise its prices a bit to avoid such a dropoff in EPS.
“Trump noted it will be a ‘simple system with no one exempt’ from the tariffs,” BofA says in the analysis. BofA projects that the iPhone developer sells approximately 50 million phones, 15 million iPads, and 10 million Macs in the U.S. annually. The bank believes that if Apple maintains its current pricing structure, the tariffs could reduce EPS by $0.26, or 3.1%, in calendar year 2026. However, “if Apple raises prices by ~3% in the U.S., the earnings impact would be $0.21 (-2.4%) in C26 (we assume 5% fewer units sold),” the analysts add.
Tariffs To Affect Apple and Other US Tech Giants?
President Donald Trump’s tariffs are shaking up global trade as the administration announces several sweeping measures affecting EV price hikes, semiconductor costs, and U.S. manufacturing. Various industry experts warn that these latest Trump tariffs could trigger numerous unprecedented price increases and supply chain disruptions across North America. Tech giants like Apple who rely on foreign markets/manufacturing could see the worst effects, forcing price hikes for products. To offset the tariff impact, Bank of America estimates Apple would need to raise prices by approximately 9%, countering an assumed 5% drop in unit sales.
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Trump proposed issuing reciprocal tariffs earlier this month, which could further the situation for Apple and AAPL stock. While most iPhone models can now be manufactured in India, the reciprocal tariffs Trump could impose on India would likely be higher than China’s 10%,” BofA said.
Despite the looming tariff issues, Bank of America analysts remain bullish on AAPL stock potential. The firm maintains its Buy rating on Apple, citing “stable cash flows, earnings resiliency & potential beneficiary of AI use on edge devices.” Further, BofA has left its financial estimates unchanged, keeping its price target at $265 per share.