Apple is scheduled to release its next earnings report on Tuesday, and analysts are tweaking their models. Naturally they can’t agree on how many iPhones the company moved during the September quarter. Some firms have trimmed their unit estimates, while others expect upside to theirs. In this article, we’ll look at two firms with iPhone unit estimates on the lower end.

Apple Inc. Removed From Focus List Ahead Of Earnings: Citi

Citi analysts removed Apple from their U.S. Focus List because they like other stocks better. While this isn’t a true downgrade, it’s probably the closest thing to it the company will get as it has been a Wall Street darling for years.

Losing near-term conviction on Apple

Citi analyst Jim Suva and his team added Apple to their U.S. Focus List in late August after their trip to Asia, but they now have higher conviction on other stocks in the space. They remain Buy-rated on the company, however, with a price target of $145 per share. In their report dated Oct. 23, they said they think investors will become more focused on gross margins than iPhone units.

The iPhone 6S cycle faces some difficult comparisons with iPhone 6 sales last year, although that isn’t keeping some firms from forecasting strong growth. The Citi team expects lackluster iPhone sales this year with a return to growth next year with the iPhone 7. As a result, they expect Apple shares to remain volatile in the near term.

Apple sets a first-weekend record

Apple management announced that they sold 13 million iPhones on opening weekend, but the company’s quarter ended after only the first two days of the weekend, which means not all of those 13 million iPhone units will be included in the September quarter results, with the rest being pushed into the December quarter.

Suva and team estimate that 11 million of those 13 million iPhones were sold on Friday and Saturday of opening weekend. As a result, they have trimmed their iPhone units from 48 million to 47 million going into Tuesday’s report. That brings them just under the consensus estimate of 48 million units and at a Street-low level. They took those 1 million units and added them to their December quarter estimate, however.

They left their iPad unit estimate at 9 million and their Mac unit estimate at 6 million.

Apple may surprise on gross margin

In the past, investors have been hyper-focused on Apple’s gross margins, and Citi analysts expect this to be the case again going forward. They think the high yields associated with the iPhone 6S and iPhone 6S Plus compared to last year’s production issues could result in higher margins this year.

As is typically the case, Apple left the exterior design of the iPhone 6S line the same as that of the iPhone 6, meaning that all the hiccups experienced with last year’s increase in display and case size have already been solved.  Further, the Citi team notes that this year’s iPhone models don’t appear to be facing any yield problems. Also a continued shift toward more expensive iPhones with more memory and the larger iPhone 6S Plus should drive further margin expansion.

SIG also conservative on Apple

In a report dated Oct. 22, Susquehanna International Group analyst Chris Caso also trimmed some of his estimates for Apple. However, he maintains his Positive rating and $155 per share price target on the company.

He believes iPhone sales in the second half of this year aren’t as strong as previously expected. He doesn’t expect sales of the smartphone to grow this year because of tough comparisons with last year’s iPhone sales. However, he also thinks investors aren’t expecting iPhone growth in the December quarter either, and he believes Apple stock has already moved before his call. Instead, he sees the bigger question as being the number of March quarter units. For now, he thinks the upcoming iPhone 7 and Apple’s strong mobile ecosystem will keep a floor on the company’s stock.

iPhone demand less “frothy”

Caso said it looks “obvious” from all the data that the iPhone 6S cycle will have a difficult time beating last year’s numbers. He said at best, he thinks sales of this year’s iPhone will be flattish, noting that while opening weekend set a new record for iPhone units, this year China was included in launch weekend, while last year it was not.

Further, he noted that last year, lead times on the iPhone 6 didn’t begin to shorten up “until well into December” and that the lack of supply for the iPhone 6 Plus went “well into” the first quarter. He also said that this year the iPhone 6S models were available earlier. However, he notes like the Citi team did above that there appear to be fewer production issues this year, but he also thinks the earlier available times for the iPhone 6S models this year is indicative of a smaller imbalance between supply and demand.

Caso’s September quarter iPhone unit estimate is in line with Citi’s at 47 million, but he trimmed his December quarter estimate from 79 million to 74 million units, which is slightly behind the consensus estimate of 75 million units.

As of this writing, shares of Apple were up 2.65% at $118.56 per share.