Goldman Sachs raises AAPL target to $182 citing stabilizing Chinese demand
Analysts at Goldman Sachs have improved their view of Apple's share, raising the stock's 12-month target price from $140 to $182 under the belief demand in China is no longer an issue, at the same time as anticipating Apple will beat its guidance for the upcoming financial results.
Apple Store in Hangzhou, China
Goldman Sachs has been slow to update its valuation for Apple's share price, after cutting the target from $182 to $140 in early January along with other analysts following Apple's financial slip. Wednesday's investor note sees the firm bring its target back up to what it was over three months ago.
"We believe Apple can deliver better than FactSet consensus revenue in the March quarter," Goldman Sachs advises, "and guide inline for the June quarter based on a new country level model we are rolling out with this report." The target change is said to "reflect less short term downside" for investors, as well as a "change in our valuation methodology."
For demand of the iPhone, there are some mixed results. Goldman Sachs believes market checks "indicate no further deterioration of demand in China," a suggestion that the situation won't get worse for Apple since its January slip, but at the same time warns "European consumer sentiment implies the possibility for worse demand there."
For later in 2019, the analysts are pessimistic about the next iPhone releases, claiming there is "increasing potential for Apple to miss consensus expectations at the unit and potentially the ASP level." The current forecast is for 61 million iPhone shipments in the December 2019 quarter, which is up 3 million from Goldman Sachs' previous estimate, but 6 million down from the Wall Street Consensus.
The Qualcomm settlement is also flagged as offering "potential risk to FQ3 margins." Apple recently settled with Qualcomm to end a series of potentially expensive lawsuits, agreeing to a multi-year licensing deal and a one-time payment to the chip producer.
The note from Goldman Sachs should also be read with knowledge that Apple is working with the company to release the Apple Card credit card this summer in the United States.
Apple Store in Hangzhou, China
Goldman Sachs has been slow to update its valuation for Apple's share price, after cutting the target from $182 to $140 in early January along with other analysts following Apple's financial slip. Wednesday's investor note sees the firm bring its target back up to what it was over three months ago.
"We believe Apple can deliver better than FactSet consensus revenue in the March quarter," Goldman Sachs advises, "and guide inline for the June quarter based on a new country level model we are rolling out with this report." The target change is said to "reflect less short term downside" for investors, as well as a "change in our valuation methodology."
For demand of the iPhone, there are some mixed results. Goldman Sachs believes market checks "indicate no further deterioration of demand in China," a suggestion that the situation won't get worse for Apple since its January slip, but at the same time warns "European consumer sentiment implies the possibility for worse demand there."
For later in 2019, the analysts are pessimistic about the next iPhone releases, claiming there is "increasing potential for Apple to miss consensus expectations at the unit and potentially the ASP level." The current forecast is for 61 million iPhone shipments in the December 2019 quarter, which is up 3 million from Goldman Sachs' previous estimate, but 6 million down from the Wall Street Consensus.
The Qualcomm settlement is also flagged as offering "potential risk to FQ3 margins." Apple recently settled with Qualcomm to end a series of potentially expensive lawsuits, agreeing to a multi-year licensing deal and a one-time payment to the chip producer.
The note from Goldman Sachs should also be read with knowledge that Apple is working with the company to release the Apple Card credit card this summer in the United States.
Comments
The analyst at Goldman following Apple is just awful. Hard to understand how he still has his job
In the end none of these analysts know anything about the future. They forecast the future using made up complicated mathematical calculations presented in charts and graphs to make them understandable to the common folk.
Hello, GS? Anybody home?
market values for companies are based on both rational and irrational reasons. I know that the trading industry doesn’t like to talk about it, but it’s true nevertheless. So their numbers are based on what they see Apple doing during the time the numbers are aimed at. Right now, the market thinks Apple is good. We see right now, that the stock, at the time I’m writing this, is about $208.30. They think it’s too high. Their earlier calculation had Apple in a worse place, with large fears about China sales. But those fears have eased off somewhat. But their estimates of sales/profits has Apple’s valuation at the newly increased price, which is lower than what it currently is.
if a stock price only went up, their estimates would be under water, but as we all know (I hope) stocks go down as well as up. I’m sure many here thought Apple’s price, late last year, when it was at $233, would continue to go up, but it dropped by a very large amount to $144. Rounded numbers. I know they’re not exact. So, while I hope they’re now inaccurate on the low side, at least they’re showing increased confidence at Apple’s short term prospects.
is it true that you know nothing of what’s happened since November?
Why?
Not opining, asking.
However, I'm going to continue holding our stock either way, for a variety of reasons. One is that the analyst consensus disagrees with this low estimate. Another is that we bought our stock at the equivalent of $23 about eleven years ago, and I have a hard time believing that Apple is all through.