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.
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.]