Goldman Sachs cuts near-term Apple estimate, but sees year-end rebound

Goldman Sachs analyst Rod Hall today reiterates his “Neutral” rating on Apple shares, cuts his price target to $265 from $300, and trims his estimates for the September 2020 fiscal year, but he sees Apple recovering in the December quarter. Despite the current COVID-19 outbreak, Hall is not changing earnings estimates for Apple’s fiscal 2021.

Apple estimates. Image: Apple logoEric J. Savitz for Barron’s:

“Following Apple’s pre-announcement we lowered our demand expectations for domestic China,” Hall writes in a research note. “However, we believe that the current situation warrants increased caution regarding global demand outside of China. This was underscored by Apple’s announcement that they will close retail locations outside of Greater China… Given all of this, we are moving to a central thesis that assumes incremental demand weakness in large global markets up through mid-May with impacts attenuating after that. If demand impacts are ultimately as severe as those we have seen in China then our model may prove optimistic.”

Hall trimmed his revenue forecasts by 4.5% for the March quarter, 5.5% for the June quarter, and 2% for the September quarter, while lifting his December quarter forecast by 5.5%.

MacDailyNews Take: Contingent on the coronavirus situation progressing well, of course, but it make sense to assume there will be a lot of pent up demand later this year, especially with Apple’s first 5G iPhones expected.

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