Citi slashes Apple price target, shares continue fall

Citi today cut its Apple price target from $240 to $200 citing China concerns.

Citi analysts said in a note to investors, “While we do not expect Apple to miss its sales guidance we do expect consensus to come lower closer to our lowered estimates in the weeks ahead. We do not expect China to ban or impose additional tariffs on Apple. However, we note that should this occur Apple has material exposure [18 percent of total sales] to China.”

Citi does not expect Apple to miss its own guidance of “revenue between $89 billion and $93 billion,” but said it sees the company reporting “towards the lower end.”

“We have found the legacy iPhones are doing better than expected due to the price reductions which makes the legacy iPhones more affordable in developing countries,” Citi said in its note. In the firm’s bear case, Citi sees AAPL dropping as low as $125 a share if Apple’s revenue growth slows to 2 percent to 3 percent a year and gross margins are much weaker than expected. Apple has guided for a gross margin “between 38 percent and 38.5 percent.”

MacDailyNews Take: Predictable lemming behavior.

When the lemmings, er… “analysts” start their upgrade parade, then you’ll know the bottom has been found.MacDailyNews, November 26, 2018

In fiscal year 2018, Apple’s revenue grew over $36 billion to $265.6 billion. For the current quarter, Apple has guided for revenue between $89 billion and $93 billion, a new all-time record. (That’s revenue of roughly $1 billion — with a B — per day.)

When analysts learn to see without the unit share blinders Apple has just removed, hopefully their eyes won’t pop out of their heads when they finally see those huge numbers and realize how very much more is to come.MacDailyNews, November 28, 2018

[Thanks to MacDailyNews Readers “Fred Mertz” and “Lynn Weiler” for the heads up.]

10 Comments

  1. A lot of powerful and wealthy people are dusting off those moth ridden wallets and rubbing their hands together. Apple is never better than when against the ropes.

  2. Wait till the numbers actually come out – I think they will actually beat All Street expectations.. This is just stupidity. Have you ever seen an empty Apple Store? People are still buying in droves.. None of these analysts have any concrete evidence that sales are slumping..

    1. Do an informal survey the next time you visit a store. What is the ratio of visitors there for service for something they already own versus people who purchase new merchandise. My experience within the most recent 3 years is the overwhelming majority of store visitors are there for service.

      1. Yet .. Are you aware Apple has broken records over and over in the last 3 years… wonder how?
        They must make loads of money from warranties and servicing products….

        1. “They must make loads of money from warranties and servicing products….”

          Yes, they certainly are. Look how much they charge for repairs and services. One of Apple’s biggest cash cows and the profit centres.

  3. “Morgan Stanley cut Apple’s price target from $253 to $236.”
    40% upside from Friday’s close?. With next quarter strong guidance going into 2019. “Apple said it expected to generate revenue of $89 billion to $93 billion during the holiday quarter, a number on the low end of the $92.74 billion that analysts were hoping for.”
    Yeah Baby!!!

  4. Citi ” we dont expect Apple to get hit by an Astroide, howevere we note should this this occurs Apple has material exposure , so we lower our target to 10 dollors “

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