Apple is set to release the earnings results from its first quarter of fiscal 2016 tonight after closing bell, and the bar has been set very low. In fact, it’s so low that any surprise, particularly in the area of iPhone unit shipments, has the potential to send shares soaring. On the other hand though, if the company misses the already low estimates, its stock could plummet.

Apple Inc. Stock Below $100 Ahead Of Earnings Report

Apple stock already reflecting weakness

In a report dated Jan. 25, Drexel Hamilton analyst Brian White said because of all the reports about weakness in Apple’s supply chain, the weakness is already reflected in the current share price. He expects the March quarter to be the trough in the iPhone maker’s sales and operating profits.

Apple’s guidance was for revenue of between $75.5 billion and $77.5 billion, and Wall Street is about at the midpoint at $76.6 billion. The implied earnings guide, according to White, is about $3.17 per share. Unsurprisingly, White’s sales estimate is above the consensus at $79.96 billion, while is earnings estimate is $3.30. The consensus is $3.23 per share. He’s predicting that Apple shipped 77.5 million iPhones during the quarter, which represents a 4% growth rate. However, other analysts are predicting a decline.

The analyst reminded investors that while the iPhone 6s lineup hasn’t been doing particularly well, his research showed that older iPhones were doing pretty well. He has a Buy rating and $200 price target on Apple shares.

Investors to turn to gross margins

Credit Suisse analyst Kulbinder Garcha and team lowered their iPhone unit estimate again, bringing their March quarter estimate to 48 million, which represents a 21.5% decline ear over year. Rather than iPhone units, he expects investors to turn their attention to gross margins, which has been important in past earnings reports.

He added that there are a number of factors that will impact margins over the next year. For example, the iPhone 6s cycle carries lower gross margins than the iPhone 6 cycle, he believes. Additionally, he said the mix shift favors the iPhone 6s over the iPhone 6s plus. Also he sees negative legacy and reminds investors that currency headwinds remain a problem for Apple and other tech companies.

On the plus side though, he believes a mix shift toward models with more memory, improvements in margins on the Apple Watch, and better margins on the larger iPad Pro could offset these negatives. Overall, he expects the gross margin to fall to 38.8% in calendar year 2016. The Credit Suisse team has an Outperform rating and target price of $140 a share on Apple stock.

Perhaps even more important than iPhone units is management’s guidance for the arch quarter. Wall Street is expecting revenue of $55.8 billion, earnings of $2.15 per share and 47 million iPhone units. Of course they don’t give an outlook on iPhone units, but they did say three months ago that March shipments would increase year over year—even though most of Wall Street is expecting a decline.

On currency headwinds

RBC Capital Markets analyst Amit Daryanani focused on the impact Apple will face from currency headwinds. He said the iPhone maker had at least $4 billion in hedging in fiscal 2015, which boosted the year’s gross margins by about 50 basis points. He adds that it’s unclear when the hedges will roll off, but he expects a headwind to gross margins over the next few quarters.

However, he adds that overall currency dynamics are “favorable so far vs. last year.” He estimates that about 40% of hedging gains were from the cost of goods sold line.

Apple shares were bouncing around today’s opening price today. As of this writing, they are up 0.13%, simply refusing to break the $100 mark, at $99.57 per share.