The club woke up to a tussle with Wall Street research notes on Apple (APPLY) Thursday morning following a report that the tech giant may be canceling plans to ramp up production of the new iPhone 14. his life. on Apple’s production capacity and continue to support the stock. What Bank of America says On the one hand, Bank of America downgraded Apple stock to neutral to buy, cutting its price target from $185 to $160 on weak consumer demand. In addition to the risk of a weaker iPhone 14 cycle, the note also highlighted a decline in services revenue, an expected drop in gross profit in the coming quarters, a reversal in pre-Covid demand levels for iPads, and a decline in demand. for Macs, and the negative impact of a strong dollar on international demand. “What we’re seeing is consumer spending is starting to really slow down… demand is decelerating and that’s the main concern,” BofA analyst Wamsi Mohan told CNBC on Thursday. Five. Shares of Apple, down more than 19% so far, were trading down nearly 5% Thursday afternoon. Shares ended Wednesday down just 1.2% but were much lower earlier in the session. Stocks actually ran to their early January highs during the summer rally that started in mid-June and ended in mid-August. What Rosenblatt Says Rosenblatt Securities upgraded Apple stock to buy from neutral. , raising their price target to $189 from $160. Analysts at Rosenblatt cite the bank’s survey of more than 1,100 US adults, which showed “significant interest” in the company’s new iPhone 14 Pro Max and Ultra watches. Speaking of higher-end demand combinations, analysts note that two-thirds of respondents intend to choose the Pro Max (40%) or Pro (26%) models. Perhaps more importantly for long-term investors concerned about Apple’s ability to grow services revenue, the Rosenblatt survey revealed that “18% of Android respondents said they had or expect in Next 12 months will buy an iPhone 14”. Regarding watches, 23% of respondents “have ordered one of them or expect to order one within the next 12 months”, while 47% “of those who want to buy one of these devices said they plan to use Ultra.” It is a very positive development that could significantly increase the average selling price of a high-end watch. “These devices are what consumers really want, based on the results of our survey,” Rosenblatt analyst Barton Crockett told CNBC on Thursday, adding that Apple is “ice cream” marks what consumers want to spend money on in this environment.” We think Bank of America is right to highlight a strong dollar as a real risk to international demand. But that said, even BofA analysts concede that their concern is more about the short-term valuation than the long-term outlook of the business. “While Apple’s long-term outlook remains favorable, we see increased risks to earnings and valuation in the near-term,” the note said. Indeed, that’s why nothing changes in our view that no matter how the absolute demand for the iPhone 14 eventually increases, investors should still own Apple in the future. long periods of time, instead of trying to trade off cycles. Long-term value creation is tied to overall growth in the installed base rather than to the number of phones Apple can sell at launch. We think the installed base will likely continue to grow as Apple’s ecosystem continues to strengthen. Furthermore, management’s “net cash neutrality over time” strategy should support earnings growth even if revenue growth stagnates for a while. In this brutal bear market, it should be noted that the shorter Apple’s stock price falls, the more shares the company can buy back using its buyback authorization program – and as a result, investors are more patient than ownership of the corporation in the long run. (Jim Cramer’s charity is long. Jim waits 45 minutes after sending out a trading alert before buying or selling a stock in his charity portfolio. If Jim had talked about a stock on CNBC TV, he will wait 72 hours after giving a trading warning before making a trade.ABOVE INVESTMENT CLUB INFORMATION FITS WITH OUR TERMS AND CONDITIONS AND PRIVACY POLICY OUR RIGHT DISCLAIMER NO OBLIGATION OR DUTY EXIST OR BE CREATED BY VIRTUE WHEN YOU RECEIVE ANY INFORMATION PROVIDED WHEN CONNECTED WITH NO ONE CONNECTION. OUTC OR SPECIFIC PROFIT.
Customers line up at an Apple Fifth Avenue store for an Apple iPhone 14 release in New York City, September 16, 2022.
Andrew Kelly | Reuters
The club wakes up to battle Wall Street research notes about Apple (APPLY) Thursday Morning in wake up a report The tech giant may be canceling plans to ramp up production of the iPhone 14. Despite the contradictions, we’re not too worried about Apple’s production capacity and keep coming back to stock.
