Analyst downgrades Apple to sell because iPhone X is too popular

“The iPhone X is so popular that it just might wind up hurting Apple down the road,” Thomas Franck writes for CNBC. “It has been so successful that more and more iPhone users are upgrading early, eating into demand for future generations, according to New Street Research.”

“The vacuum in sales will be so great that investors should sell the stock, analyst Pierre Ferragu said in a note Monday,” Franck writes. “‘We expect a material disappointment in 2019,’ Ferragu said. ‘The iPhone X has been very successful and well received by consumers. It has been so successful, that we think it has brought forward demand.'”

“iPhone users upgrading early ‘will drive an ‘air pocket,’ and the introduction of a lower-price premium OLED phone won’t be enough to make up for the shortfall,’ the analyst added,” Franck writes. “New Street expects iPhone revenues in 2019 will be 10 percent below the Wall Street consensus. For his part, Ferragu believes that Apple’s 2019 and 2020 earnings per share will be 9 percent and 6 percent below the average analysts’ projections, respectively. Shares of Apple fell 0.8 percent on Monday. New Research’s price target of $165 represents roughly 25 percent downside from Friday’s close at $217.58.”

Read more in the full article here.

MacDailyNews Take: iCal’ed for future use.

[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]

43 Comments

        1. All Americans seem to use the phrase “I could care less” which of course makes no sense. Here in Britain we use equally silly phrases like “cheap at half the price” which is also nonsensical. People incorrectly say “In one foul swoop, instead of the correct fell swoop”. The problem is only going to get worse (or better depending on your point of view) as the internet is causing a soup of billions of ideas and interpretations for language. Mark my words “you’ve all got another think coming” 😉

    1. What’s interesting is that there’s other investors who have voted with their wallet differently.

      For example, the Gotham index Plus Fund (GINDX). Its an interesting strategy of a portfolio of longs which are balanced against a bunch of shorts to hedge against downside risks. Guess who their #1 “Long” stock is? Yup, APPL.

      FYI, for anyone now contemplating a longer look at Gotham, do be aware that their minimum starting investment is a “mere” $250,000.

  1. This is fucking stupid. And also yet another recycled bs ‘analysis’ that’s been stated about iPhone 4, iPhone 5, iPhone 6, iPhone 7, and now iPhone X. Honestly, why the fuck do these things get printed.

    1. Man, you know this has been ANALysts 101 for Apple since 2007. I guess they have gotten bored with supply chain sources “reductions in production”. Between supply chain checks, too reliant on iPhone sales, too few iPhone models, iPhone X is too expensive. I guess this year if they come out with the 4 models with a cheaper iPhone, it will be Apple has too many models and the cheaper one will bring down margins. LOL

  2. This might actually be the dumbest thing I’ve ever read. Pierre Ferragu should be embarrassed. If anyone is dumb enough to trust their money to this guy, they don’t deserve having money.

  3. His future outlook only sounds counter-intuitive but it’s not. The highly variable output produces a lot of sales in one quarter but low sales the next. This outcome is bad only for bloodsuckers/investors, not for Apple the corporation’s ability to grow its hoard of money.

    1. you are truly a lost case .. aren’t you..
      I investors are blood suckers..?? …Lol…

      Without investors there would have been no Apple or any other buisness for that matter …….
      But im sure Artists and alike would still roam around clulessly … living in their lala land .. expecting handouts…..

      1. Just to clarify something about my post..
        In the last line i meant Artist .. ( not Artists) refering to JD, Artist ….the person i was responding to..
        There is a big difference…

  4. this guy is just looking at the instantaneous amount of income and the first derivative (rate of change of income). he should be looking at the integral. the total amount of money might be the same, or even slightly lower due to earlier than expected higher sales, but apple has the money for a longer time period and thus the added opportunity to leverage it to their advantage. according to this guy it would be better to become a millionaire on the second-last day of your life, with a huge rate of change of income, instead of being a millionaire at an early age and staying there with little or no change over most of your life. to use an old mathematical joke this guy is differentiating on a noise signal (since there is some randomness inherent in measuring income), and that never works out well.

  5. I never understand how these financial lackeys keep their jobs. Of course, their masters may want them to give out this sort of retarded information. I’m sure they have no problem sleeping at night despite lying to investors all the time. They’re absolutely disgusting liars. I mean, look at where Apple is now. A trillion dollar company and there have been those analysts who keep telling investors to avoid buying Apple. Think of all those investors who listened to those liars and missed the chance of building up their wealth.

  6. Just frantic Financial Institutions trying to generate churn (buy/sell) of AAPL, because they don’t make anything from all the clients sitting long in the stock and infuriatingly enjoying the Dividends!

    So, what do they do, get some idiot of an analyst to “make up anything” to try and get the stock to tank …. 🖕to Wall Steet!

  7. The only argument for not wanting people to update their phones as often is if there was proof that not upgrading significantly expanded someones life span and therefore how many phones they can buy in a lifetime.

  8. Given how MDN loves to hype Super Cycles, it’s interesting how they haven’t bothered to acknowledge what happens –BETWEEN– those cycles.

    For example: the iPhone 6 is widely acknowledged as a huge boom in iPhone sales. It offered a fresh new design in multiple screen sizes, greater capabilities, and no loss of features. In comparison, the succeeding iPhone 6S and 7 models BOTH undersold the 6. In those models, there were only incremental updates and people who enjoyed the 6 had little reason to rush to update.

    So now if the current X and the faster 8 models are so awesome, and this fall’s models are supposed to be either cheaper (less capable) or just adding a Phat Phone to the X family, then how many of you are predicting a super cycle? Only MDN, because MDN thinks every iPhone introduction warrants a stupid superman action figure photo.

    Apple is well on its way to becoming a stodgy, slow, incremental improvement corporation that demonstrates no desire to delight the customer if it costs them a fraction of a penny to do so. I predict Apple will have more sizes of OLED phones with ugly notches, that they will not drop prices for OLED phones but rather start blowing out older models, and sales for the new X sizes will be modest. Most people aren’t interested in paying >>$1000 for a Phat Phone, and Apple has repeatedly shown that it will never offer a fully featured small screen phone. People who loved the smaller form factor will get old hardware or hobbled hardware, and they will have to suck it up. Welcome to the Cooked Apple.

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