Apple shares fall amid lack of optimism
2023.01.03 10:04
Apple shares fall amid lack of optimism
Budrigannews.com – Apple (NASDAQ:) was downgraded by BNP Paribas Exane analysts. to Neutral from Outperform and a target price of $140 per share, down from the previous $180.
Due to production disruptions at Foxconn’s key factory in China, estimates for the iPhone and Mac have been lowered, which is reflected in the lower rating and price target. Earlier this morning, Reuters reported that Foxconn’s production at this facility has returned to 90 percent of its full capacity.
The experts currently anticipate that Apple should send 224 million iPhone units in 2023 with the brought down gauge reflecting production network issues from Foxconn and a more mindful position on purchaser spending for top of the line gadgets. They now anticipate that iPad and Mac shipments will decrease by 7% and 9%, respectively, year over year, due to the reduction in estimates.
BNP Paribas Exane lowered its FY23-25 EPS estimates by approximately 6%, placing them between 5% and 6% below the consensus.
In a client note, the analysts stated, “Consensus has started to trim estimates, and we believe this will continue and weigh on the shares.”
The analysts believe Apple stock is trading at a “premium valuation,” which is difficult to justify, based on these estimate reductions.
“Compared to its platform peers, we see little reason why Apple should trade at a premium (currently at 22x FY23e PE). We see no major positive catalyst for the stock and believe the shares are fairly priced, as new hardware products like AR/VFR and Apple Car may not arrive before 2024-26,” the analysts concluded.
In 2022, Apple stock dropped nearly 27%.
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