Apple Stock Sinks as Concern Over Demand Grows
(Source: barrons.com)

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(Original link: barrons.com)

The drumbeat of negative news for Apple goes on.
Rosenblatt Securities analyst Jun Zhang lowered his price target to $165 from $200 for Apple (ticker: AAPL) stock, predicting more Wall Street firms will lower their estimates for the iPhone maker. He also reiterated his Neutral rating for the company. The technology underpinning cryptocurrencies could make stock trading faster and cheaper. But it will be some time before the financial services industry can put blockchain to work.
“Although we are at the low end of consensus iPhone estimates, we believe the Street will continue to trim down their estimates,” he wrote on Thursday. “We believe the lack of iPhone shipment growth, along with tough comps for services revenues, will lead to estimates coming down.”
Apple stock was down 2.3% to $172.63 on Thursday. Its shares have declined more than 20% since the end of October. Concern has mounted about weak demand for the iPhone models released this fall. Suppliers of parts for Apple have issued warnings about demand for their products.
The analyst lowered his estimate of earnings per share for Apple to $11.12 from $12.87 for fiscal 2019. He predicts consumers will wait longer to upgrade their smartphones during the transition from fourth- generation to fifth-generation wireless technology.
A survey of 6,900 consumers, reported Thursday by UBS, said global intentions to buy new iPhones are down from last year’s levels. New models, which in recent years have made up as much as three quarters of the units sold, now represent less than 60% of consumers’ intended purchases.
UBS, which has a Buy rating on Apple stock, dropped its price target on the shares to $210, below FactSet’s average, from $225.
On Monday, Cirrus Logic (CRUS), a maker of audio chips, reduced its financial guidance for its third quarter , citing “recent weaknesses in the smartphone market.” In its most recent annual filing, Cirrus Logic said Apple accounted for 81% of its sales in its fiscal 2018. Newsletter Sign-up
Last month, The Wall Street Journal, citing people familiar with the matter, reported that Apple cut orders for all three newly released iPhone models.
Earlier in November, wireless chip maker Qorvo (QRVO) reduced its financial guidance for its third quarter, citing weaker demand for high-end smartphones. And iPhone suppliers Lumentum Holdings (LITE) and Japan Display (6740.Japan) lowered their financial forecasts on Nov. 12.
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