Bank of America trims Apple price target to $185 over foreign exchange headwinds

Bank of America has trimmed its price target on Apple shares from $200 to $185, citing foreign exchange headwinds.

Apple Park in Cupertino, California
Apple Park in Cupertino, California

Samantha Subin for CNBC:

Analyst Wamsi Mohan in a note to clients on Tuesday lowered the bank’s price target on [AAPL] stock from $200 per share to $185.

He added that investors continue to focus on how the technology giant will perform to tackle rising inflation. “We expect the F3Q revised impact from COVID-related disruptions and industry-wide silicon shortages to hit the low end of the guided $4-8bn range, however, improved supply is partly related to weaker demand in China, which has been under lockdown, is related,” Mohan said.

According to Bank of America, these headwinds could drive total revenue of $5 to $6 billion in the September quarter, while the rising dollar could create 5% and 7% year-over-year headwinds in the fiscal third and fourth quarters, respectively…

“Given the recent rally in stocks, we would not be surprised to see a momentary pullback on a weak guide, but we see repeat buy on upcoming product cycles, long-term growth in services, opportunity to monetize installed base, and strong capital returns,” Mohan said.

MacDailyNews Take: Apple customers tend to be markedly more resilient to inflation than, say, buyers of cut-rate consumer-grade Windows PCs, Chromebooks, and Android phones.

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7 Comments

  1. Amid recession if apple beats Wall Street expectations on Thursday and reaches $185 price target, it needs miracles. Both Google and Microsoft missed earning reports today.

    1. Ironically MDN claims that Apple customers are resistant to inflation while some of its most aggressive ever-present name calling posters have contended (incorrectly) since about January 6, 2021 that the US economy is in freefall. Can’t have it both ways. While the Fed may be playing catch-up aggressively pulling the one lever it has, any US consumer or company should be happy that the US $ is very resilient. Nothing happening in the war-affected macroeconomy should be a surprise nor should it be cause for hyper partisanship. Be glad the USA has deep reserves of natural resources, labor, and capital. Apple is sitting on so much unused cash, it’s not worth worrying about this quarter’s estimates. It doesn’t matter and next quarter everyone will be talking about the new Mac Pro or whatever.

      To those pessimists, change your attitude. If you object to prices, then switch roles and stop being a consumer. Now is an excellent time to be an employee, entrepreneur, or individual creator. There is a lot of opportunity out there. It doesn’t take much of a change for you to profit from a soft economy. Even selling your art or unused stuff on eBay can generate a lot of cash flow; US consumers are still relatively flush with cash and buying.

  2. Steve: Thanks for an upbeat post. Apple has occasionally dropped drastically during recessionary periods but a few times has maintained surprising strength when almost everything else had tanked. I do wish I’d sold some shares on January 3 when the stock peaked but I’ll be hanging on through whatever this current rough patch brings. So far, Apple has always soared after downturns. (Yeah, it did it more vigorously when Steve was at the helm but it’s still solid.)

  3. It’s more the forward-looking projections that are sinking the stocks with earnings close to expectations. If they are much below the previous relevant quarter then the share price can drop substantially.

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