“Shares of Apple were underperforming the broader index yesterday after analysts at Credit Suisse lowered their 2016 iPhone sales estimates by 8 million units, to 214 million, and lowered earnings per share estimates by 4% — citing weakness in the supply chain,” Jim Cramer and Jack Mohr write for The Street.
“While we do not disagree that near-term iPhone sales appear set to hit a temporary bump, we expect this to be a hiccup rather than a long-term downtrend, and thus view the recent 5% pullback in shares as a potentially intriguing buying opportunity (we are currently restricted from trading shares),” Cramer and Mohr write. “There are plenty of long-term growth opportunities to support the story moving through and beyond 2016, but we think the start to next year could be softer than many analysts — ourselves included — had previously anticipated. We are not concerned in the least, however, and in hindsight, we aren’t particularly alarmed considering how outsized the iPhone 6 upgrade cycle was a year ago. We think that subscribers should take consolation in the fact that the near-term downdraft will likely be temporary (driven by a lapping of iPhone upgrade-cycle peak and near-term inventory builds), and not driven by competitive displacement.
“All in all, we view recent supply-chain concerns as exaggerated, and advise subscribers to take the headline noise with a grain of salt, as the company’s fundamental growth story remains intact, long term),” Cramer and Mohr write. “Given Apple’s enduring ability to draw in consumers and engender unparalleled brand loyalty, we do not expect a sudden reversal of demand for their products.”
Read more in the full article here.
MacDailyNews Take: Yup.
RBC cuts Apple price target to $140, citing iPhone supply chain concerns – December 17, 2015
Piper Jaffray: Individual component suppliers are not indicative of the health of Apple’s overall iPhone business – December 16, 2015
Apple stock slumps on Dialog Semi warning – December 15, 2015
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]