Apple (NASDAQ:AAPL), hit a two-month low Wednesday before rebounding late with the broader market. But the stock has closed lower in nine of December’s 12 sessions and dropped 5.9% for the month, according to (WSJ)
Wall Street hasn’t meaningfully made broad cuts to expectations for iPhone sales over the next several quarters just yet. But analysts been producing plenty of cautious-sounding missives of late.
“There have been many notable supply-chain suppliers to Apple in the last few weeks to either pre-release, report or guide to weaker-than-predictable results,” Raymond James noted Wednesday. The investment bank’s U.S. web survey “suggests modestly fewer iPhone upgrades are likely in the coming 3 and 12 months than a year ago.”
There’s been worry for some time about how this iPhone cycle would fare after iPhone 6 and 6 Plus did boffo business following their late 2014 releases. The so-called S cycle (this year’s models are the 6s and 6s Plus) often doesn’t have the noteworthy changes and upgrades that models do when the iPhone model number moves higher. As such, year-over-year sales growth is generally not as robust.
In fact, some have been projecting that this fiscal year–which ends in late September–will be the first that iPhone sales fall from a year earlier.
“Mizuho’s Japan team continues to indicate weakness in Apple’s supply chain for iPhones.” it remarked yesterday, saying next quarter’s “procurement could end up in the low-40 millions, which would be meaningfully below current consensus” shipments of 60 million. It sees peers’ Apple estimates “likely to move lower over the next few weeks.”
RBC has cut its fiscal second-quarter shipment view to 54 million while noting “recent datapoints suggest supply chain is tracking closer to 50 million.” But the investment bank remains bullish and says “the stock should work appreciably higher through” 2016 amid higher average iPhone prices, iPad Pro demand and raised gross margins. It did, though, cut its price target $10 to $140.
Meanwhile, we’re approaching eight months since Apple shares late hit a record split-adjusted high of $134.54 in April. Trading sideways afterward until starting to break down in late July ahead of August’s market slump, shares didn’t make much headway even before this month’s weakness. On Thursday, shares were up 0.9% to $112.31 in pre-market trading. WSJ Report
On the other hand, Raymond James analyst Tavis McCourt said in his Dec. 16 report that he has reduced his estimates for fiscal 2016 starting with the March quarter as a result of the numerous weak supply chain data points. However, he believes that these data points have already been priced into Apple shares following their peak this year and underperformance so far in the December quarter. He noted that the last time Apple stock moved into a downturn, the stock bottomed out in the June quarter after management disappointed investors with weak March and June quarter guides, according to valuewalk
McCourt has a Market Perform rating and no price target on Apple stock, but he thinks it could rise to $159 per share if the company is able to surpass his earnings per share estimate for 2016 by 10% and reach an S&P 500 P/E. However, if Apple’s earnings miss his estimates by 10% and shares reach a valuation of eight times P/E excluding cash, then the stock could plunge to as little as $90 per share next year, he believes. His fiscal 2016 non-GAAP earnings estimate is currently $9.16 per share, down from $9.33.
In a report dated Dec. 15, Stifel analyst Aaron Rakers and his team noted that Apple supplier Dialog Semiconductors cut its revenue guidance for its December quarter to between $390 million and $400 million, which is down from the previous guide of between $430 million and $460 million. They specifically said their mobile division is to blame for the weakness, and Rakers estimates that Apple contributes more than 75% of Dialog’s total revenues and possibly as much as 90% of Mobile revenue. Valuewalk Report
Another news report, On Wednesday, Apple Insider suggested that the company does not have any plans to bring its latest signature feature 3D Touch to its range of tablets for one year at least. The iPhone is a premiere device in Apple’s portfolio by a wide margin, and therefore, it makes complete sense that the company keeps it ahead of the tablet as far as features are concerned, according to valuewalk
According to Mikey Campbell of Apple Insider, the iPhone firm is facing certain scaling issues because of which it is not able to make the current 3D Touch tech work on larger displays such as on those on the iPad. The tech will take some time before it can come to the firm’s line of tablets though. The website learned from a source that Apple has already begun working on similar tech for larger screens.
Apple Hong Kong IFC Store Adds Third Floor
Apple Insider reveals that the iPhone maker is working to develop a third floor for its first Apple store in Hong Kong, which originally opened in 2011. Located at the International Finance Center (IFC), the tech giant’s signboard outside the new floor claims that it will be opening “soon,” even though no official dates have been disclosed as yet, according to Bidnessetc
Apple Inc.’s (NASDAQ:AAPL) ongoing attempts to expand its retail stores all around China have been increasingly evident after it rolled out new stores in Dalian, Beijing, Chengdu, and most recently, Nanning on December 12. It seems that this expansion plan is part of the tech giant’s agenda to launch at least 40 Apple Stores in China by 2016.
Since this Apple Store outlet is located in the city’s Central District and hangs over one of its busiest roads, we believe that the store expansion will help Apple lure in more customers. It also seems that the renovation will soon end, as speculation states that lights have already been switched on inside the space, possibly hinting at its upcoming opening. Judging by the company’s popularity in Asia, which has led to its drastic expansion plan; providing customers with three floors full of Apple products will surely work as a great marketing push for the tech giant in Hong Kong. Bidnessetc Report
Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings.