Sep 29, 2022 (PressReach.com via COMTEX) -- Apple stock /zigman2/quotes/202934861/composite AAPL -1.96% fell further Thursday as Bank of America analysts downgraded their rating and price target on the world’s most valuable tech firm, citing declining customer demand and a negative reaction to the new iPhone 14.
Wamsi Mohan , an analyst at BofA Global Research, shaved $25 off his Apple stock /zigman2/quotes/202934861/composite AAPL -1.96% price target, dropping it to $160 per share while downgrading his rating to ‘neutral,’ citing “significant negative estimate revisions” for the company’s near-term profitability.
Mohan referred to a “weaker iPhone 14 cycle,” citing higher risks to global consumer spending, slowing advances in services revenues, a return to pre-COVID demand levels for iPads and Macs, and headwinds from the strengthening US currency.
“Apple stock /zigman2/quotes/202934861/composite AAPL -1.96% has gained strongly this year and is seen as a relative safe haven,” Mohan said in a client letter. “However, we see a risk to this outperformance over the coming year… driven by lower consumer demand,” the analysts write.
Bloomberg reported earlier this week that Apple had instructed suppliers and assemblers to scale back plans to increase production of the newly launched iPhone 14 by up to 6 million units, instead opting to chase a target of 90 million - roughly in line with last year’s total and its early summer forecast - for the second half of this year.
This comes on the heels of a cautious prognosis from its major assembler, Foxconn, which forecasts current-quarter smartphone sales to be level with last year, citing “geopolitics, inflationary pressure, and the Covid epidemic.”
Following its better-than-expected third-quarter profits in late July, Apple refused to disclose precise September quarter sales projections but indicated overall revenue growth would likely outperform increases in the three months ending in June.
Apple said that strong China demand and a little supply chain impact helped iPhone sales climb 2.8% year on year to $40.67 billion in the June quarter, well ahead of the $40.5 billion Street projection.
Overall, Apple made more than $19.44 billion in its fiscal third quarter, with sales up 2% year on year to $82.96 billion, well ahead of analysts’ expectations of $82.88 billion.
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