Apple EPS Could Hit $13 on Services Growth, Evercore Says

A new analyst forecast released on May 14, 2026, suggests Apple (AAPL) could see its earnings per share (EPS) climb as high as $13. The projection from Evercore ISI is anchored in the sustained, high-margin growth of the company's Services division. This bullish target represents a substantial increase from Apple's current earnings trajectory and signals growing confidence in its ability to monetize its vast ecosystem of over 2.2 billion active devices beyond initial hardware sales.

Why is the Services Division Key to Growth?

Apple's Services segment has become the company's primary engine for profit growth and margin expansion. This division includes revenue from the App Store, Apple Music, iCloud+, Apple TV+, Apple Pay, and advertising. Unlike the cyclical nature of hardware sales, services provide a recurring and predictable stream of high-margin revenue. For fiscal year 2025, the division generated over $100 billion in revenue.

The gross margin for Services is substantially higher than for hardware products like the iPhone or Mac. While hardware margins typically hover around 35-40%, Services margins often exceed 70%. This powerful dynamic means that every dollar of new services revenue has a much larger impact on Apple's bottom line and, consequently, its earnings per share.

This profitability is central to Evercore's $13 EPS thesis. As the installed base of Apple devices continues to grow, the company has more opportunities to sell high-margin digital content and subscriptions to a captive audience. This shifts the investment narrative from unit sales to lifetime customer value.

How Does the $13 Target Compare to Consensus?

The $13 EPS forecast from Evercore ISI is notably optimistic compared to the broader Wall Street consensus. Current analyst estimates for Apple's forward EPS are clustered in a tighter range of $10.50 to $11.25. Evercore's projection sits nearly 15% above the high end of this consensus, indicating a strong belief in catalysts not fully priced in by the market.

To put the target in perspective, Apple's trailing twelve-month EPS currently stands at approximately $7.85. Reaching $13 would require an earnings growth of over 65% from current levels. This highlights the transformative potential analysts see in the company's ongoing pivot toward a services-oriented business model.

The valuation implications are also significant. A $13 EPS would place Apple's forward price-to-earnings ratio at a more attractive level, assuming the stock price remains stable. Alternatively, it could justify a much higher share price if the market maintains Apple's current valuation multiple of around 28x earnings.

What Catalysts Could Drive This Performance?

Several key catalysts support the potential for accelerated earnings growth. The integration of artificial intelligence across the iOS ecosystem is expected to create new premium features and services, potentially driving a new subscription tier or increasing the value of existing bundles like Apple One. This includes AI-powered productivity tools and enhanced personalization.

Expansion in financial technology is another critical driver. The continued global rollout of Apple Pay and the growth of the Apple Card and high-yield savings accounts deepen the company's relationship with consumers. These financial products generate transaction fees and interest income, further diversifying the Services portfolio with revenue streams that now total over $10 billion annually.

Finally, the sheer scale of Apple's user base provides a powerful foundation. With over 2.2 billion active devices worldwide, even minor increases in the average revenue per user (ARPU) can translate into billions of dollars in new, high-margin revenue. New gaming and media content for Apple Arcade and Apple TV+ are designed to capture more of this opportunity.

What Are the Risks to This Forecast?

Despite the bullish outlook, significant risks could impede Apple's path to a $13 EPS. The most prominent headwind is regulatory scrutiny. Antitrust regulators in the United States and the European Union are actively investigating Apple's App Store policies, particularly the 15-30% commission it charges developers. Any ruling that forces Apple to allow third-party payment systems or app stores could directly impact this lucrative revenue stream.

Competition remains a persistent challenge. In music and video streaming, Apple faces intense pressure from established players like Spotify and Netflix, which can limit pricing power and increase content acquisition costs. Similarly, in digital advertising, it competes with giants like Google and Meta, who have long-standing advantages in the space.

Market saturation in developed countries is another concern. With high smartphone penetration rates in North America and Europe, future growth for both hardware and services increasingly depends on emerging markets. Success in these regions is not guaranteed and may require different strategies and price points, potentially impacting overall margin profiles.

Q: How much revenue does Apple's Services division generate?

A: In its most recent fiscal year, Apple's Services division surpassed an annual revenue run rate of $100 billion, making it the company's second-largest segment after the iPhone. For the most recently reported quarter, it posted revenue of $25.8 billion. This scale means that if Services were a standalone company, it would rank among the Fortune 50.

Q: What is Apple's current price-to-earnings (P/E) ratio?

A: Apple's price-to-earnings (P/E) ratio currently fluctuates around 28x its trailing twelve-month earnings. A higher P/E ratio often indicates that investors expect higher future earnings growth. If Apple were to achieve a $13 EPS, its forward P/E ratio would become more attractive, potentially justifying a higher stock price to maintain its current premium valuation.

Q: Does this forecast account for Apple's share buybacks?

A: Yes, analyst EPS forecasts for Apple typically factor in the company's aggressive share repurchase program. By buying back its own stock, Apple reduces the number of shares outstanding. This has the effect of increasing earnings per share, as the total net income is divided among fewer shares. The company has authorized over $90 billion in buybacks in the past year alone.

Bottom Line

Evercore ISI's $13 EPS target underscores that Apple's future valuation hinges on the continued expansion of its high-margin Services segment.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.