Raymond James analyst Chris Caso cut his Apple price target to $305 from $360, citing expectations of slower iPhone and wearables demand due to the, you guessed it, COVID-19 pandemic.
Tomi Kilgore reports for MarketWatch:
Caso reiterated his outperform rating on Apple. “Our checks suggest iPhone component order cuts on the order of 15% of prior expectations,” Caso wrote in a note to clients. “Prior to the [COVID-19] crisis, we believe Apple had been forecasting upside to Q2 build plans.”
He said he still expects an iPhone launch in the fall, but at a lower volume.
For all of 2020, Caso expects total sales to decline 2% from 2019, while the FactSet sales consensus of $265.2 billion implies 1.9% growth.
MacDailyNews Take: Of course, it’s hardly surprising to see Raymond James cut their price target on Apple from $360 due to very significant COVID-19 headwinds. The sooner we can all get back to work, in relative safety*, the better.
*Nothing is perfect on this rock. We need both a functioning economy and COVID-19 mitigation to coexist as best as humanly possible. This is not an “either/or” issue, this is a “how do we do both the best we possibly can.” We need a nuanced pre-vaccine mitigation plan – social distancing, masks, work from home as much as possible, no handshakes, frequent hand washing, hand sanitizer everywhere, travel limits, etc. – for when this temporary lockdown ends, as it must, many months before a vaccine is available.
I agree with the MDN take. We need to get back to business, but ONLY under strict conditions that protect public health and safety. Without those conditions, we will have another outbreak and another economic crisis.
“For all of 2020, Caso expects total sales to decline 2% from 2019”
Fantasy.
“We need a nuanced pre-vaccine mitigation plan – social distancing, masks, work from home as much as possible, no handshakes, frequent hand washing, hand sanitizer everywhere, travel limits”
This plan is mostly in place now & deaths have increased to nearly 2K per day!
” We need both a functioning economy and COVID-19 mitigation to coexist as best as humanly possible.”
Yeah, just ignore all those bodies piling up at the morgue. The reality is we’re stuck where we are & opening up the economy while death & infection rates are increasing will make things worse.
The daily U.S. COVID-19 death rate peaked 3 days ago. Try to keep up.
The economy must be reopened or millions more will die from the depression than from COVID-19 which is projected to have an annual death rate less than several severe flu seasons.
Not an overreaction. The projections you cite assume social distancing will continue at current levels through at least May. If you remove the mitigation measures, the projections no longer apply,and deaths rise back into the unimaginably high range the President was discussing just a week ago. Yes, we need to get back to work, but only in a way that will dodge hundreds of thousands of avoidable fatalities and millions of hospitalizations.
Learn how to interpret the data you cite before posting it. As for projections, accuracy thus far have been dismal.
March 2, 2020: Cuomo………”no reason for undue anxiety”………” the general risk remains low in New York,”……………
March 7,2020….”- Cuomo declares a state of emergency in New York”
The 1st quote is applicable to nearly every high profile politician in the country.
Incompetent people making major decisions.
Just remember, every other tech company will reflect softer sales as a result of this virus. If anything, Apple is bettter-positioned to remain viable and to bounce back more quickly when the economy picks up.
Incidentally, the projection YOU cited shows the death rate peaking today, not three days ago. It shows a peak in hospital resources back then. That assumes we aren’t going to see any more hot spots like New York City, an assumption that depends entirely on maintaining existing mitigation measures through May. Your model, not necessarily mine.
Keeping the “Sledge Hammer” (Steve Hanke_Applied Economist at Johns Hopkins) style of mitigation going for much longer, the effects will be profound. One view suggests 50% of small business have enough cushion to last 3 months before failure/default. Small business make up about 50% of our econ.
Instead of paychecks, govt “should” spend the money on personal protection devices and monitoring professionals, for the workplace, that would heighten safety levels for returning workers. Each indi business would be better off devoting resources similarly that enables work to continue.