Apple stock extends slide as BofA downgrades rating, lowers iPhone demand price target

“We see the risk of (Apple stocks) outperforming in the coming year…driven by weaker consumer demand,” said BofA Global Research analyst Wamsi Mohan.

Apple Inc. (AAPL) – Get Apple Inc. Report Shares extended declines Thursday after Bank of America analysts lowered their rating and price target for the world’s most valuable tech company, citing dwindling consumer demand and weak reception for the new iPhone 14.

BofA Global Research analyst Wamsi Mohan cut $25 off his Apple price target to $160 a share, while lowering his rating for the stock to “neutral” as he anticipated “material negative estimate revisions” for short-term earnings.

Mohan noted what he called a “weaker iPhone 14 cycle” set against heightened risks to global consumer spending, declining gains in services revenue, a return to pre-COVID demand levels for iPads and Macs, and headwinds from the rising US dollar.

“Apple stocks have outperformed significantly this year and are seen as a relatively safe haven,” Mohan said in a customer note. “However, we see a risk to this outperformance in the coming year … driven by weaker consumer demand.”

Apple shares were down 2.62% in pre-market trading to indicate an opening bell price of $145.77 apiece.

Earlier this week, Bloomberg reported that Apple has ordered suppliers and assemblers to scale back plans to increase production of the newly launched iPhone 14 by as much as 6 million units, opting instead for a target of 90 million – about in line with last year’s count and the forecast for early summer – for the second half of this year.

That followed a cautious outlook from its chief assembler, Foxonn, who predicted that smartphone revenues in the current quarter will remain the same as last year, citing “geopolitics, inflationary pressures and the Covid pandemic.

Apple declined to provide detailed sales forecasts for September after better-than-expected third-quarter results in late July, but said overall sales growth would likely exceed earnings for the three months ended June.

Apple said solid demand in China, as well as a moderate hit in the supply chain, helped iPhone revenue rise 2.8% year-on-year to $40.67 billion in the June quarter, just above the Street-market. forecast of $40.5 billion.

Overall, Apple earned more than $19.44 billion for the fiscal third quarter, while revenue grew 2% year-on-year to $82.96 billion, just above analyst estimates of $82.88 billion. .

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