M Stanley doesn’t believe in Apple and reduces indicators
2022.12.07 08:02
M Stanley doesn’t believe in Apple and reduces indicators
Budrigannews.com – Apple’s (NASDAQ:) Overweight rating and $175 per share price target were reiterated by Morgan Stanley analysts. stock despite the fact that FQ1 revenue estimates were lowered for the second time in a short time.
The new forecast for iPhone shipments implies a 11% decrease year-over-year, and the analysts reduced estimates for FQ1 iPhone shipments by 3 million to 75.5 million. This reduces the quarterly projection for revenue by 3 percent to $120.3 billion.
They maintain the FQ2 forecast for iPhone shipments because they do not anticipate that Apple will be able to replace lost units in the March quarter.
To account for a slower China production ramp, analysts at Morgan Stanley made the second cut to iPhone and revenue estimates for this quarter. Regarding Apple’s first fiscal quarter, the broker previously reduced its forecast by 1.5 million iPhone 14 Pro units and 1.5 million iPhone 14 Pro Max units.
For the December quarter, they anticipate earnings per share of $1.88 on revenue of $120.3 billion, which is 3% and 6% below consensus, respectively. Despite iPhone demand durability, analysts maintain their positive outlook on Apple stock.
“While we may be taking an overly conservative approach given 1) our Greater China Hardware team estimates just a 1-2 million unit incremental shortfall from the slower iPhone production ramp, 2) our prior iPhone shipment forecast was already 3 million units below what iPhone builds implied in the December Q, and 3) we still think its more likely iPhone demand is deferred vs. destroyed,” the analysts explained in a client note. “We also believe more thoroughly de-risking estimates today is the prudent decision considering the uncertainty of the production situation in China.”
They anticipate that the near-term focus for investors will be on whether the Cupertino-based tech titan can recover lost shipments in the upcoming quarters, as Apple stock moved lower in recent weeks due to lower iPhone shipments from China.
“We trust interest for the iPhone 14 Star/Genius Max stays strong, supporting the view that lost interest in December is bound to be conceded into Spring than obliterated,” the experts closed.
Yesterday, Apple stock dropped 2.4 percent to $142.91.
