Loop Cuts Apple Stock Target as iPhone Sales Weaken, Reports Investing.com

Loop Cuts Apple Stock Target as iPhone Sales Weaken, Reports Investing.com

Analysts at Loop Capital cut their 12-month price target on Apple (NASDAQ:) stock from $185 to $170, citing weaker demand, increasing competition and flattening average selling prices (ASPs). of the iPhone.

Against this backdrop, the brokerage also lowered its overall revenue and profit estimates for APPL for the 2024 calendar year.

“Against this backdrop, we now expect AAPL’s overall revenue and EPS to decline year-over-year in fiscal 2024 for the first time since 2016,” the analysts said.

Loop Capital warned that near-term forecasts for AAPL, including March quarter consensus estimates for iPhone sales, overall revenue and EPS, are potentially vulnerable, with the June quarter facing significant risks.

The company pointed to weak iPhone sales due to a combination of weaker organic demand and increased competition. For the first time in years, Apple is also seeing stagnation in iPhone ASPs, attributed to slowing capacity growth and a less favorable product mix.

“In fact, we currently believe that Street iPhone units and revenues may be 20% too high (this is not a typo). And overall Street revenue and EPS could be 10% too high,” the analysts said.

As for Apple stock itself, analysts said it’s “not ‘expensive’ per se…but also not very cheap.”

“It is difficult to discern whether valuation is currently friend or foe, given that AAPL is trading more in the middle of its recent trading range but with weaker fundamentals,” they explained.

Analysts believe AAPL’s performance could fluctuate in the short term, but expect a more stable outlook in the second half of 2024.

This improvement is expected due to less variability in estimates compared to consensus and potential new developments in generative AI and AR/VR, such as VisionPro, acting as catalysts.

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