Goldman Sachs cuts AAPL target, earnings forecasts on bleaker iPhone predictions

Posted:
in AAPL Investors
Apple's stock value fell on Thursday morning in the wake of Goldman Sachs reducing price and earnings targets, along with its predictions for future iPhone shipments.




The bank's target for Apple stock has been cut from $136 to $124, said Goldman Sachs analyst Simona Jankowski in a memo obtained by AppleInsider. Earnings per share (EPS) forecasts for Apple's fiscal 2016, 2017, and 2018 have been shrunk to $8.39, $9.70, and $10.19, respectively, down from $8.40, $10.53, and $11.42.

Jankowski blamed the prospect of slower market growth, as well as a shift to lower average selling prices (ASPs) as Apple focuses on "emerging" markets like India. The shift will "drive a higher mix of the lower-priced iPhone SE (and its successors) relative to the higher-priced iPhone 7 (and its successors)," the analyst suggested.

Goldman Sachs's forecasts now call for only 211 million iPhone sales in 2016, instead of 212 million. The gap widens in predictions for 2017 and 2018, with new estimates of 231 million and 223 million versus previous hopes for 243 million and 251 million.

On Wednesday IDC called for Apple to ship some 227 million iPhones this year. Previously, the research firm was anticipating numbers up to 232 million.

Analysts have become increasingly pessimistic about the iPhone's potential in 2016, especially after Apple reported its first year-over-year decline for iPhone sales in the March quarter. Figures may rebound this fall once the company launches new iPhones.
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Comments

  • Reply 1 of 21
    jcdinkinsjcdinkins Posts: 114member
    This should read "Goldman Sachs wanted to get their clients in Apple at a cheaper price."
    latifbpmagman1979jony0schlackericthehalfbeeanton zuykovbaconstangmike1netmagebadmonk
  • Reply 2 of 21
    leavingthebiggleavingthebigg Posts: 1,158member
    jcdinkins said:
    This should read "Goldman Sachs wanted to get their clients in Apple at a cheaper price."
    And, how much money did Goldman Sachs bet against Apple before making this cut?
    magman1979anton zuykovbadmonk
  • Reply 3 of 21
    NY1822NY1822 Posts: 601member
    I wonder if these analysts are baking in anything other than iPhones for their 3 year earnings estimates (new products? revamped watch? tv subscription?)
    baconstangbadmonk
  • Reply 4 of 21
    slurpyslurpy Posts: 5,179member
    I guess these fucking banks couldn't stand the prospects of Apple stock returning to the 3 digits, so they're vomiting out this doom and gloom like clockwork and making these proclamations. You know what I find amazing? How criminal entities and utter failures like Goldman Sachs, who fucked over so many, and had to be bailed out, still have the power to dictate the value of the most successful company on the planet, as if their proclamations are worth anything.
    patchythepirateRayz2016lord amhranmagman1979bobschloblatifbpminisu1980baconstangbadmonkpalomine
  • Reply 5 of 21
    TempletonTempleton Posts: 84member
    That is why we buy leaps.
    schlacksuddenly newton
  • Reply 6 of 21
    NY1822NY1822 Posts: 601member
    slurpy said:
    I guess these fucking banks couldn't stand the prospects of Apple stock returning to the 3 digits, so they're vomiting out this doom and gloom like clockwork and making these proclamations. You know what I find amazing? How criminal entities and utter failures like Goldman Sachs, who fucked over so many, and had to be bailed out, still have the power to dictate the value of the most successful company on the planet, as if their proclamations are worth anything.
    and let's not forget Goldmans manipulation of Tesla the day before the offering 
    magman1979john_dowen
  • Reply 7 of 21
    NY1822NY1822 Posts: 601member
    Sounds like someone got burned with their short position to me
    magman1979latifbptrashman69ai46baconstanganton zuykovbadmonk
  • Reply 8 of 21
    VisualSeedVisualSeed Posts: 217member
    Who cares? I just want to know what the next iPhone that they are only going to sell a quarter billion of is going to look like.
  • Reply 9 of 21
    macxpressmacxpress Posts: 4,973member
    Goldman sucks...
    magman1979suddenly newtonlatifbpbaconstanganton zuykovbadmonk
  • Reply 10 of 21
    suddenly newtonsuddenly newton Posts: 13,763member
    slurpy said:
    I guess these fucking banks couldn't stand the prospects of Apple stock returning to the 3 digits, so they're vomiting out this doom and gloom like clockwork and making these proclamations. You know what I find amazing? How criminal entities and utter failures like Goldman Sachs, who fucked over so many, and had to be bailed out, still have the power to dictate the value of the most successful company on the planet, as if their proclamations are worth anything.
    It's about as above-the-board as a billboard that reads: WE BUY UGLY HOMES
  • Reply 11 of 21
    lkrupplkrupp Posts: 7,309member
    Unless you are heavily invested in AAPL don’t worry about it. Apple has plenty of money and plenty of time to move into other markets. Apple will still sell millions upon millions of iPhones, iPads, Macs, etc. It’s the growth issue that the Wall Street types wring their hands over. It always is. Apple isn’t going out of business, isn’t losing money, isn’t on its last leg as some pundits would have you believe. AAPL pays decent dividends now as a value stock. I’m glad Tim Cook and the Board are resisting Wall Street’s clamor for short term returns.
    latifbpminisu1980baconstangdelreyjones
  • Reply 12 of 21
    gatorguygatorguy Posts: 21,102member
    jcdinkins said:
    This should read "Goldman Sachs wanted to get their clients in Apple at a cheaper price."
    And, how much money did Goldman Sachs bet against Apple before making this cut?
    They may (or may not) actually have some good inside information on Apple's product sales. They're the lead manager for Apple's US bond (loan) sales aren't they? 
    edited June 2016
  • Reply 13 of 21
    minisu1980minisu1980 Posts: 128member
    Seems like this doom and gloom is going to continue at a minimum until the new iPhone release. I don't think it is a good idea to bet against Apple long term, however this seems like a great opportunity to earn on some put options.
    asdasd
  • Reply 14 of 21
    dougddougd Posts: 280member
    What's more amazing is that the the market reacts to this BS
    edited June 2016 latifbp
  • Reply 15 of 21
    NY1822NY1822 Posts: 601member
    what's even more amazing is they see 26% upside and Wall Street sells off
    palomine
  • Reply 16 of 21
    maestro64maestro64 Posts: 4,658member
    like clock work, stock raise the analysis cut outlook so they their clients short positions can pay off and they can start the process all over again.
    badmonk
  • Reply 17 of 21
    jungmarkjungmark Posts: 6,715member
    I love how people treat analyst guesses as facts. The only fact is these analysts are guessing. 
    fastasleepnetmage
  • Reply 18 of 21
    slurpy said:
    I guess these fucking banks couldn't stand the prospects of Apple stock returning to the 3 digits, so they're vomiting out this doom and gloom like clockwork and making these proclamations. You know what I find amazing? How criminal entities and utter failures like Goldman Sachs, who fucked over so many, and had to be bailed out, still have the power to dictate the value of the most successful company on the planet, as if their proclamations are worth anything.
    The Fool.com published an interesting article about a week ago re: analyst iPhone prediction accuracy.  The pointed out how estimates vary wildly each quarter and that even the falsely (in my opinion) Ming Chi Kuo erred by more than 4% when he famously estimated more than 71 million iPhone 6 sold in FQ1/2014, then erred by about 20% the following quarter.

    The truth is that no one can accurately forecast Apple units sold on anything resembling a consistent basis.  That means that getting close was a matter of luck.

    I pay no mind to unit sales estimates.    Th only thing I watch is management's Guidance.  When management Guides YoY Net Income growth Apple beats that Guidance by and average of 4% (quarterly average going back to FQ3/2012).  When management does not guide Net Income growth that beat rate drops to 1%.

    Bottom line unit sales estimates are worthless revenue/net income indicators.
  • Reply 19 of 21

    jungmark said:
    I love how people treat analyst guesses as facts. The only fact is these analysts are guessing. 
    Hooray.  jungmark gets it.
  • Reply 20 of 21
    sacto joesacto joe Posts: 791member
    slurpy said:
    I guess these fucking banks couldn't stand the prospects of Apple stock returning to the 3 digits, so they're vomiting out this doom and gloom like clockwork and making these proclamations. You know what I find amazing? How criminal entities and utter failures like Goldman Sachs, who fucked over so many, and had to be bailed out, still have the power to dictate the value of the most successful company on the planet, as if their proclamations are worth anything.
    The Fool.com published an interesting article about a week ago re: analyst iPhone prediction accuracy.  The pointed out how estimates vary wildly each quarter and that even the falsely (in my opinion) Ming Chi Kuo erred by more than 4% when he famously estimated more than 71 million iPhone 6 sold in FQ1/2014, then erred by about 20% the following quarter.

    The truth is that no one can accurately forecast Apple units sold on anything resembling a consistent basis.  That means that getting close was a matter of luck.

    I pay no mind to unit sales estimates.    Th only thing I watch is management's Guidance.  When management Guides YoY Net Income growth Apple beats that Guidance by and average of 4% (quarterly average going back to FQ3/2012).  When management does not guide Net Income growth that beat rate drops to 1%.

    Bottom line unit sales estimates are worthless revenue/net income indicators.
    Hey, Greg, good to see you posting here!

    That's a really good point. But YOY is less important than YO2Y, IMHO. Apple's on a 2 year cycle. The year just passing was the "bad compare" year, and the year coming up is the "good compare" year. I'm looking for a Q4 fy '16 guidance that's low but an actual Q4 fy '16 that's at least 10-20% growth YO2Y, Lord willing' and the creek don't rise. I'm hoping for AAPL to come out of the doldrums after July's earnings, but if I'm right about that guidance it may not come out of the doldrums until October.
    edited June 2016
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