Tariff exemptions turn a potential 40% hit to Apple earnings estimates into a 5% drop: Bank of America

Just how important are the recent tariff exemptions for Apple’s financial outlook?

Here’s Bank of America analyst Wamsi Mohan to crunch the numbers in light of the revised messaging surrounding trade levies:

“In a scenario where Apple does not raise prices in the US, we see a negative $0.41 impact (-4.9%) to EPS in calendar year 2026. If Apple raises prices by ~10% in the US, we estimate the earnings impact would be $0.11 (-1.2%) in C26 (we assume 5% fewer units sold). We assume that 15 million iPhones will be manufactured in India for export to the US (no tariff, with remaining India production satisfying local demand) and the remaining ~35 million projected iPhones as well as all iPad and Mac units sold in the US will face the 20% tariff imposed on Chinese imports. At the previous 145% and 26% tariff rates for China and India, AAPL would face a $3.13 headwind to EPS (-36.9%) in C26 without any pricing. At 20% pricing and 5% demand destruction, this lessens to a negative $2.37 (-28.0%) impact to C26 EPS.”

Obviously, as the analyst outlines, there’s a variety of factors that the iPhone maker can pull to try to mitigate the impact of tariffs, like raising prices. As such, he’s more bullish on the outlook for profits than the above estimates indicate, seeing Apple’s 2026 earnings coming in at $8.47 (versus the consensus estimate of $8.02).

Mohan also thinks the stock can trade at a 30x multiple to those prospective profits, leaving him with a price target of $250. Near the depths of pain for Apple shareholders last week, he deemed this a “particularly enhanced buying opportunity” for the stock. In the short term, that view has been vindicated: shares are up double digits since that call.

Mohan has previously suggested that iPhone prices could rise by 90% if the smartphones were assembled in the United States.