Goldman Sachs downgrades Apple stock to ‘sell’

Goldman Sachs analyst Rod Hall downgraded Apple Inc. stock to “sell” on Friday and cut its price target to $233 from $250, as it reduced its earnings estimates for a third time since Feb. 17.

Goldman Sachs Apple. Image: Apple's powerful iPhone SE starts at just US$399
Apple’s powerful iPhone SE starts at just US$399
Ciara Linnane for MarketWatch:

Analysts led by Rod Hall said they are modeling a far deeper reduction in unit demand through mid 2020 followed by a shallower recovery heading into 2021. “We also assume some lingering ASP (average selling price) weakness as consumers look to economize similar to what we have seen in prior downturns,” they wrote in a note to clients. “In addition to this we believe that Services growth slows substantially in 2021 and that Services as a percentage of revenue actually stagnates in that year.” Goldman is expecting a 36% decline in iPhone unit demand in the second quarter and a 24% decline in the first half of calendar 2020.

Price weakness could affect 5G design choices too, and limited global travel may cause the delay of the launch of this year’s updated iPhone, it said

MacDailyNews Take: “Could.” “May.” “Assume.”

Price got too high, yesterday, Rod?

Goldman Sachs analyst Rod Hall is a bad Apple analyst. Last September, Apple even had to take the rare step of publicly disputing a negative call by Hall. Last October, Hall claimed that his team of genius “analysts” at Goldman wondered if anybody would buy 5G iPhones as they did not believe that 5G offers consumers much in the way of additional utility.

On September 13, 2019, Hall slashed Goldman Sachs’ price target for Apple shares to $165. One quarter later, Apple shares sold for $327.85.

Oops.

Even in the midst of a global pandemic lockdown, with retail stores closed around the world, Apple’s share price is $286.69. Hey, Rod is only off by $121.69 per share today! That’s better than the $162.85 by which he blew it back in January.

In short, at least as far as Apple goes, Goldman Sachs analyst Rod Hall doesn’t know what the hell he’s talking about.

Given his limited reasoning capabilities, we doubt that, if pressed, Rod Hall would be able to analyze his way out of a wet paper bag.MacDailyNews, July 17, 2019

[Attribution: Apple 3.0. Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

23 Comments

    1. Rod Hall is an equity analyst. He doesn’t make country GDP predictions. That’s what the company economist does, Jan Hantzius. That guy is very smart and reliable.

  1. Upgrading Iphones is a luxury. I don’t see many luxury purchase happening for many months after people get back to work. They will be buried in credit card bills for a while

    1. In these current times it is vital to have a working phone and a reliable source of transportation (not the public sardine type). SO PEOPLE WILL BUY OR UPGRADE.

  2. I haven’t looked at my stock holding valuations since this crisis started to affect the market. I know it has gone down so why put myself through the agony?
    I haven’t made any changes to my holdings and will wait this one out. I certainly will not listen to analysts who suggest to sell when the stock is already down. It is interesting to note that AAPL has rebounded since the lows and is only 8-9% off its highs.

  3. I, on the other hand, played the market and increased my AAPL holdings by 10% and simultaneously was able to take another 10% boost in cash. I sold everything again this morning. Thankfully when Trump was denounced as a xenophobe for his travel ban, I took 5 minutes to read the info on the virus, and so I knew this was gonna crush the world. Sadly, when I posted it on FB, I was denounced by my liberal friends for siding with Trump. Those same people now have no memory of their prior position.

      1. I have not, and that was also a different time. I remember I was against the Iraq war, like Trump…but I take your point in a good humored way. I stand by my position on the Iraq war, however. 🙂

  4. Short memories. AAPL sits on a pile of cash, no? Riding out an extended downturn, while far from pleasant, is something that Apple are well equipped to do. Cook and company’s expansion into subscription services seems prescient.

    The bigger question to me is what acquisition opportunities have emerged?

  5. Sent To Rod Hall, Goldman Sachs, as a Direct Message via LinkedIn

    Steve Jobs Moniker For You: “BOZO”

    For people who think they know “Apple.”

    or Incompetent people within or outside of Apple, Inc.

  6. Have to give Goldman credit here. Their last previous have proven to be correct.

    When they kept $260 target when AAPL was $300 and everybody set high 300, I thought $260 is impossible and Goldman is crazy. Not anymore.

    TBH i believe next earnings will plummet the stock and we will sure retest March lows. Can even go below if overall market is bearish.

      1. There is more going on that just coronavirus. Market crash would have happened even without it. Russell 2000 for example has not recovered to pre 2008 highs. MAGA stocks are the ones which dragged the S&P and NASDAQ up, everything else, not so much.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.