Pacific Crest cuts Apple target price to $127 on ‘stable’ but ‘soft’ iPhone demand

“Pacific Crest’s Andy Hargreaves this morning reiterates an Overweight rating on shares of Apple, but trims his price target to $127 from $132, after cutting estimates to reflect what he thinks is ‘stable’ but ‘soft’ demand for the company’s products, the iPhone in particular,” Tiernan Ray reports for Barron’s.

“Hargreaves writes that his ‘checks’ suggest sales for the fiscal Q2 ending this month are trending to the ‘low end’ of a forecast range of $50 billion to $53 billion offered by the company back on January 26th,” Ray reports. “Hargreaves cuts his Q2 iPhone unit shipment estimate to 47.5 million from 49 million, and cuts his total company revenue estimate to $50 billion from $51.3 billion.”

“Despite the cut, Hargreaves thinks that ‘valuation and customer stickiness continue to make AAPL attractive’ to own,” Ray reports. “He looks forward to an “iPhone 7,” presumably this fall.”

Read more in the full article here.

MacDailyNews Take: We’ll be happy to get past the ‘tough compare’ this quarter.

3 Comments

  1. I hate to have to say this but Apple really needs to find some other decent business apart from selling only iPhones. It’s really ridiculous how the stock won’t move for a year and a half due to slowing iPhone GROWTH. It’s as though the company isn’t making any money at all from any of its other products. Take a comparison of Apple and Tesla. It seems to me as though Tesla has a negative balance sheet and they’ll never sell enough cars to make up for it. Elon Musk stands up and tells investors he’s going to sell X number of electric cars this year despite gasoline being dirt cheap and investors believe him with great optimism, so the stock continues to rise.

    With Apple, channel checks are enough to determine Apple won’t sell enough iPhones to satisfy anyone. Wall Street is pessimistic over Apple’s future and has been for a year and a half. I’d say it’s just as reasonable to believe Apple will sell an awful lot of iPhones this year than not. Why does Tesla’s business model appear better than Apple’s? I really don’t know why. Apple needs to find a way to get across to investors that they can do more than just sell iPhones. Apple certainly has the money to get into other businesses as well as any other company out there. I’m not angry, just puzzled at why Apple’s business model isn’t working for shareholders as well as other tech companies seem to manage.

    1. It’s because some people are not as smart as you. They pick companies based on what they like or use. They don’t know how to read financial statements, or what a P/E is, or what intrinsic value is, etc.

      Then there are others that don’t understand how trends are unfolding. One example is the Apple Watch and acessories. This product is just getting started and will achieve incredible things like being able to detect disease, sequence genomes, warn of impending heart attack and stroke, etc. Most people can’t fathom these things because their brains can’t connect the dots.

      It’s also easier for some people to see the future with companies like Tesla because Tesla broadcasts their roadmap. Apple, on the other hand, has been burned by bringing in too many outsiders. Take Gates and the GUI and Schmidt and the iPhone as examples. So, Apple holds their cards to their vests these days.

      I think potential investors should realize that it took many decades for Apple to achieve their level of success. Apple is not going to suddenly roll out of bed tomorrow and stop dazzling us with their creations.

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