Apple (AAPL) reports 2016 third quarter earnings on July 26, but most analysts are expecting it to have a minimal effect on Apple’s stock price, regardless of what’s revealed.

What the earnings will most likely show is that Apple is still essentially the “iPhone” company. Apple’s EPS growth/decline has been closely correlated with iPhone sales growth, especially over the past couple of quarters.

Apple earnings and iPhone sales move in the same direction. (Image: FactSet) More

The past two quarters have also been quarters that Apple has seen its earnings decrease year over year, a change from the norm.

Q3 is expected to continue to show a big decline in Apple’s EPS, from $1.85 a share to $1.40 a share, representing a fall of 24%, year over year. Revenue is projected to decrease as well, from $49.6 billion to $42.2 billion. Three quarters of falling earnings may strike some as negative enough to cause the stock to fall further, but the stock is already 20% lower than its 52-week high for a reason.

In Oppenheimer analyst Martin Yang’s own words, this quarter is “unlikely to change minds.” If you were a bull before, you’ll continue to be a bull. And if you thought the stock has more downside in the future, then you probably won’t be thinking differently about that either.

There are some other bright spots when you look at Apple’s different business segments, with Nomura analyst Jeffrey Kvaal expecting app revenues to increase by 66%. This will be the leading contributor to the Apple Services’ segment expected increase of 20%. However, this segment simply does not make enough revenue or profit to move the needle, and iPad and Mac revenues are expected to be mostly flat.

Looking to the future

This time around, analysts and investors will be focused on future quarters.

Goldman Sachs sees the iPhone 7 acting as a key catalyst in the near future, with lead analyst Simona Jankowski seeing “upside to consensus FY17 estimates based on the iPhone 7.” This is based on proprietary surveys that Goldman has done, along with an analysis of the current installed base. Similarly to Kvaal, Jankowski does not expect to see the stock react very much to earnings. In the long-run, Goldman has a price target of $124 on Apple, representing nearly 30% upside.

Mariann Montagne, a senior investment analyst at Gradient Investments (with a one billion dollar AUM) is bullish on Apple as well, with Gradient owning shares of the technology company. However, she believes that upcoming product launches across multiple segments, including the “Watch, iPhone, and iPad” are likely to cause revenue to start growing at an “accelerated” pace over 2016 and 2017.

Some key risks include weakness in China, and the fact that UBS’s tracking is showing the iPhone upgrade cycle increasing over time. This may hold even more true this year, as the iPhone 7 is not expected to be too different from the 6s. If that’s the case, investors may need to wait until 2017 to see significant growth in Apple’s earnings, alongside a truly redesigned iPhone.

—

Rayhanul Ibrahim is a writer for Yahoo Finance.

Read more:

From biomass to nuclear: The evolution of American energy usage since 1776

How pros are advising clients in this bizarre world of negative rates

As the stock market hits new highs, Wall Street is getting more skeptical

How the Internet of Things will explode in 5-10 years

The ‘nonstore’ retail boom is not letting up