Apple stock (AAPL) – Get Free Report continues to trade rangebound between $140 and $150 apiece, but a few Wall Street analyst seem increasingly concerned about the downside risk in the short term.
Today, I look at a couple of recent reports from Apple experts, all of whom have been sounding the alarm about how disappointing the Cupertino company’s holiday quarter could be.
Figure 1: Apple Stock: Analysts Sound The Alarm
Unsplash
See also: Apple Stock: How It Stacks Up Against Big Tech In 2022
iPhone Problem Could Be Worse Than Expected
On Monday, December 12, Barclay’s Tim Long came out with a downbeat research note on Apple. According to the sell-side analyst, the current iPhone crisis may be more severe than many seem to believe.
For starters, Tim Long sees “a 15 million to 20 million [iPhone] unit shortfall for the quarter”, which is worse than consensus expectations by about 5 to 10 million. If that were not enough, the analyst also believes that the downside gap to original projections will most likely result in permanently lost sales rather than sales deferral into the March quarter.
At the core of the argument is Barclay’s view that iPhone demand has been waning. This is a contrarian take to the general understanding (including that of Apple’s management team itself) that demand for iPhones remain strong, and that the problem is solely a supply-side one.
Even Some AAPL Bulls Are Cautious
Then, there is Oppenheimer’s Martin Yang, who holds a buy rating on Apple stock. Despite being a bull, the analyst has recently lowered his price target by $20 to $170, suggesting upside potential of only about 18%.
Yang is not as pessimistic about Apple as Tim Long seems to be. However, he now projects 76 million iPhones sold in the December quarter, a drop of about 6 million from his previous estimate of 82.5 million. As a result, his EPS projection is now 9 cents below consensus.
Apple Stock Falls Behind
Given the recent wave of sell-side estimate revisions that were driven by the iPhone headwinds, it is not a surprise that Apple stock has been lagging the broad market in the past month or so.
See chart below, provided by Stock Rover, showing the performance of the S&P 500, Nasdaq and Dow Jones indices relative to AAPL (the flat blue line) over the past four weeks.
Figure 2: AAPL vs. S&P 500, Nasdaq and Dow.
Stock Rover
Since mid-November, Apple shares have declined a couple of percentage points. Meanwhile, the S&P 500 has enjoyed some positive momentum, having broken through the 4,000-point level for the first time since September 2022.
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Apple Maven)
