Analyst fears over iPhone XR shipments, future sales figures prompt AAPL sell-off

Posted:
in AAPL Investors edited November 2018
Apple's stock price has taken a beating during early Monday trading, after analysts from two investment firms downgraded the iPhone producer following the latest quarterly results release, with analysts pessimistic on shipment figures and the lack of data going forward.

The iPhone XS and iPhone XS Max
The iPhone XS and iPhone XS Max


On Thursday, Apple reported marginally higher shipments than the year previous for the iPhone, rising from 46.7 million to 46.9 million iPhones over the three-month period. The result was at the low end of its forecasted scale, below the company's prediction of 47.5 million shipments.

Despite the shipment slump, Apple importantly managed to increase the average selling price (ASP) of iPhones year-on-year from $617.99 to $793, which helped boost iPhone revenue from $28.8 billion in the quarter last year to $37.2 billion this quarter. This seemingly wasn't enough to please some investment firms and analysts, who focused more on the shipments than the reported revenue, and may have affected the opinions of other investors.

At the time of publishing, AAPL was valued at $199.50 per share. This puts Apple well below a market cap of $1 trillion, and the price itself at levels last seen in August.

Rosenblatt Securities Jun Zhang downgraded Apple's stock in a note on Friday from Buy to Neutral, reports CNBC, advising to its clients that it would be difficult for Apple to offset weaker volumes with higher selling prices for the second half of 2019.

"Calendar fourth-quarter guidance reflects our cautious view on weaker-than-expected sell-through and production reductions for the iPhone XS and iPhone XR, wrote Zhang. "We downgrade to neutral."

Zhang's pessimistic view was also shared by Bank of America Merrill Lynch on Friday, which also downgraded Apple from Buy to Neutral. The reasons for the downgrade include a slower growth in App Store revenue, the guidance for the December quarter implying weaker-than-expected iPhone unit sales, and weaker growth in emerging markets due to a stronger dollar.

There is also a complaint about Apple's decision to change its reporting, in that the company will no longer be including unit sales for product categories like the iPhone in its results. According to Merrill Lynch, investors "will likely interpret ending iPhone unit sales figures as negative."

Since the latest quarterly results release, there have been observations of high trading volumes for Apple, which could be due to the change in reporting.

Rosenblatt kept the price target for Apple steady at $200, while Merrill Lynch reduced its 12-month price target from $235 to $220.
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Comments

  • Reply 1 of 33
    sirozhasirozha Posts: 618member
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
  • Reply 2 of 33
    auxioauxio Posts: 2,032member
    Investors trying to cash in a bit to pay for their Christmas shopping?
    magman1979
  • Reply 3 of 33
    Rayz2016Rayz2016 Posts: 4,790member
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    Not yet. I think it’ll drop a bit more. 
  • Reply 4 of 33
    Mike WuertheleMike Wuerthele Posts: 5,008administrator
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


  • Reply 5 of 33
    quinneyquinney Posts: 2,526member
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
  • Reply 6 of 33
    YupaYupa Posts: 6unconfirmed, member
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    there is nothing unethical in buying shares of a company like Apple when it's low. Apple is big, organized, strong, reliable. The low share price would affect Apple if suddenly the company needed to sell shares to raise money, for example. Not a problem for Apple.

    What is unethical : to monitor a little company, to foster some troubles for the company, to wait, to buy shares when the company is down, to buy it in a hostile take-over, to fire employees, to transform the company in a cash cow, to sell it, to leave it. Rinse and repeat. That is unethical ! 

    Buying shares to follow a company, promote it in long term and making some revenues from dividends for your old years, it's all fine.
    edited November 2018 zoetmbbaconstangyojimbo007
  • Reply 7 of 33
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I gladly bought some more, at $199.75. I have no idea where the bottom is, but this looked plenty low for me give my valuation of the company (and my investing horizon).

    I have no doubt that Apple is repurchasing the heck out of the shares, at these prices. I think that it has another $70B left of its previously announced repurchase program.
    edited November 2018 wreighvenbaconstang
  • Reply 8 of 33
    Mike WuertheleMike Wuerthele Posts: 5,008administrator
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    I do not. There is no legal obligation for me to NOT buy, but I personally feel that it is unethical to do so, given that AI is my job, Apple is my beat, and our audience is not small.
    edited November 2018 StrangeDays
  • Reply 9 of 33
    Just a quick nit to pick, but in the first paragraph, the article implies that Apple made a prediction of 47.5 million iPhones for the quarter. Perhaps I'm mistaken, but Apple has never publicly made a prediction about iPhone unit sales, aside from that first one where Steve Jobs said Apple was looking for 1% of the mobile phone market.
    muthuk_vanalingam
  • Reply 10 of 33
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    Although AppleInsider has in the past at various times said they are a rumor site, a news site and not a news site (depending on who was saying it at the time), they are a quoted source of STORIES and speculation on Apple, which has the potential to influence investors and markets. It’s unethical for a “news site” or one involved in reporting to promote or attack a stock and company with the intent to inflate or knock down that stock, without informing the public of any financial interest in that stock. I’ve been informed at times that none of the staff at AI hold any AAPL stock. I assume that is still the case.
    StrangeDays
  • Reply 11 of 33
    Same bull crap every year. Fear of there own mothers prompts sell off! Anal-ist are so full of it.

    magman1979
  • Reply 12 of 33
    sirozhasirozha Posts: 618member
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    Although AppleInsider has in the past at various times said they are a rumor site, a news site and not a news site (depending on who was saying it at the time), they are a quoted source of STORIES and speculation on Apple, which has the potential to influence investors and markets. It’s unethical for a “news site” or one involved in reporting to promote or attack a stock and company with the intent to inflate or knock down that stock, without informing the public of any financial interest in that stock. I’ve been informed at times that none of the staff at AI hold any AAPL stock. I assume that is still the case.
    If anyone of them owns a mutual fund via a conventional investment account or a retirement account, they own AAPL. It's hard nowadays not to own AAPL if you are investing in retirement unless you choose not to be in any tech mutual funds.
  • Reply 13 of 33
    Mike WuertheleMike Wuerthele Posts: 5,008administrator
    sirozha said:
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    Although AppleInsider has in the past at various times said they are a rumor site, a news site and not a news site (depending on who was saying it at the time), they are a quoted source of STORIES and speculation on Apple, which has the potential to influence investors and markets. It’s unethical for a “news site” or one involved in reporting to promote or attack a stock and company with the intent to inflate or knock down that stock, without informing the public of any financial interest in that stock. I’ve been informed at times that none of the staff at AI hold any AAPL stock. I assume that is still the case.
    If anyone of them owns a mutual fund via a conventional investment account or a retirement account, they own AAPL. It's hard nowadays not to own AAPL if you are investing in retirement unless you choose not to be in any tech mutual funds.
    I have chosen not to be in any tech mutual funds. So has the rest of the staff. Ethics aren't hard.
    edited November 2018 magman1979mac_dogStrangeDaysmuthuk_vanalingam
  • Reply 14 of 33
    sirozha said:
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    Although AppleInsider has in the past at various times said they are a rumor site, a news site and not a news site (depending on who was saying it at the time), they are a quoted source of STORIES and speculation on Apple, which has the potential to influence investors and markets. It’s unethical for a “news site” or one involved in reporting to promote or attack a stock and company with the intent to inflate or knock down that stock, without informing the public of any financial interest in that stock. I’ve been informed at times that none of the staff at AI hold any AAPL stock. I assume that is still the case.
    If anyone of them owns a mutual fund via a conventional investment account or a retirement account, they own AAPL. It's hard nowadays not to own AAPL if you are investing in retirement unless you choose not to be in any tech mutual funds.
    I have chosen not to be in any tech mutual funds. So has the rest of the staff. Ethics aren't hard.
    To say you can't put your money into a tech fund because you cover tech is perhaps stretching things on the 'ethics' front. (There is, however, a sensible diversification reason to avoid having both your human capital and your financial capital tied up in the same sector).

    But, whatever works...
    edited November 2018 StrangeDays
  • Reply 15 of 33
    Wall Street "Analysts" (aka Chuckleheads) are just manipulating the price again for a huge future gain as they always do. 
  • Reply 16 of 33
    Bought $10K worth of shares at $200 per share. I've been waiting for a discount on AAPL...
    SpamSandwich
  • Reply 17 of 33
    waltgwaltg Posts: 90member
    Well,,, APPLE,,, the company that wall street loves to hate!!! Proved it again, also they have done nothing but line the speculators pockets which they have been waiting for.. Also they have reinforced my two analogies of the stock market, first is,,,, they act like the herds on the African plains, something screams here, they all run over there,,,, second,,, "just gossiping like a bunch of old ladies" No proof, nothing factual at all.... Just think, a company that continues to break records in sales AND PROFIT every quarter, is Cash Rich and they are worried about some quarterly numbers that in this day and age are almost meaningless especially with the so called analyst forecasters that can't seem to ever get anything correct.... guess we will see...
    baconstang
  • Reply 18 of 33
    JFC_PAJFC_PA Posts: 363member
    Nikkei chimes in with another lowered order rumor. I can’t remember them being accurate in Apple for close to a decade. 
  • Reply 19 of 33
    This was Apple’s guidance for 4Q18.
    ”Apple's guidance for the quarter from its Q3 results forecasts revenue at between $60 billion and $62 billion, with a gross margin between 38 percent and 38.5 percent. Operating expenses were expected to be between $7.95 billion and $8.05 billion, and a tax rate of around 15 percent.”
  • Reply 20 of 33
    avon b7avon b7 Posts: 4,309member
    quinney said:
    sirozha said:
    Anyone is courageous enough to jump in a big way? Price is good, and in the past, AAPL always recovered from these catastrophic-looking dips. Will it this time?
    I would, because I like what I see here as far as opportunities go, but I don't feel that it's ethical for me to do so.


    How so? Do you have information not available to the public?
    I do not. There is no legal obligation for me to NOT buy, but I personally feel that it is unethical to do so, given that AI is my job, Apple is my beat, and our audience is not small.
    It's a personal decision and that has to be respected but I don't see anything unethical.

    It's your private investment and if you don't have insider information, then AI being your job and having a large audience shouldn't be considerations IMO. Apple being your beat, if anything, makes any purchase more informed. 

    But whatever you do, don't forget to inform the wife! 


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