Rosenblatt cuts AAPL target again, citing worries over 'Services' growth and low iPad Pro ...
Analysts have started looking at the iPad Pro, and iPhone sales beyond the holiday quarter for reasons to cut Apple stock target price estimates, with a historically bearish one dramatically scaling back his target price.
iPad Pro with Smart Keyboard Folio
Jun Zhang from Rosenblatt Securities claims to be seeing iPad Pro sales "weaker than we expected so far," which the analyst is blaming on the price of the device. Additionally, coupled with that, Zhang is expecting to see iPhone XR and iPhone XS production to "come down slightly" -- but in comparison to what isn't clear.
In the longer term, Zhang believes that "Apple's pricing strategy [is] already affecting unit growth," but the analyst ins't expecting a change in strategy or pricing in the near-term.
Other reasons cited for a lowering of Apple's target price on Thursday are an overall weakness in the smartphone market prior to the wide adoption of 5G, a lack of iPhone shipment growth, and his prediction of poor Services revenue growth that he appears to be standing alone in making.
In fiscal year 2020, Zhang expects little revenue growth from Apple, with a whole-year revenue expectation of $270 billion, about 7 percent lower than consensus estimates.
As a result of all of these factors, Zhang has cut Rosenblatt's Apple stock target price to $165, predicting darker days ahead. However, his claims of low iPad Pro sales seem premature -- and impossible to compare with actual figures -- plus he is the only analyst predicting slow services growth.
Historically, Zhang has under-estimated not just Apple's actual unit sales, but also the contribution of Services to Apple's bottom line. He was part of the chorus claiming that the iPhone X sales were bad -- which was proven wrong by Apple's actual sales numbers and repeated remarks by Apple that the iPhone X was the best-selling iPhone after release in 2017 and well into 2018.
Zhang's predictions is only the latest one that appear driven more by concerns that Apple will no longer report unit sales similarly to how its competitors report, more than any other factor, given that the smartphone market has been at least relatively flat for the last two years versus Apple's actual sales figures. However, Zhang's prediction for Rosenblatt is the first to prognosticate bad growth of Services revenue.
Apple is predicting a likely record-breaking holiday sales period, expecting between $88 billion and $92 billion for the holiday quarter. The 2017 holiday season resulted in $88.3 billion in revenue -- a period that analysts badly underestimated iPhone X sales.
iPad Pro with Smart Keyboard Folio
Jun Zhang from Rosenblatt Securities claims to be seeing iPad Pro sales "weaker than we expected so far," which the analyst is blaming on the price of the device. Additionally, coupled with that, Zhang is expecting to see iPhone XR and iPhone XS production to "come down slightly" -- but in comparison to what isn't clear.
In the longer term, Zhang believes that "Apple's pricing strategy [is] already affecting unit growth," but the analyst ins't expecting a change in strategy or pricing in the near-term.
Other reasons cited for a lowering of Apple's target price on Thursday are an overall weakness in the smartphone market prior to the wide adoption of 5G, a lack of iPhone shipment growth, and his prediction of poor Services revenue growth that he appears to be standing alone in making.
In fiscal year 2020, Zhang expects little revenue growth from Apple, with a whole-year revenue expectation of $270 billion, about 7 percent lower than consensus estimates.
As a result of all of these factors, Zhang has cut Rosenblatt's Apple stock target price to $165, predicting darker days ahead. However, his claims of low iPad Pro sales seem premature -- and impossible to compare with actual figures -- plus he is the only analyst predicting slow services growth.
Historically, Zhang has under-estimated not just Apple's actual unit sales, but also the contribution of Services to Apple's bottom line. He was part of the chorus claiming that the iPhone X sales were bad -- which was proven wrong by Apple's actual sales numbers and repeated remarks by Apple that the iPhone X was the best-selling iPhone after release in 2017 and well into 2018.
Zhang's predictions is only the latest one that appear driven more by concerns that Apple will no longer report unit sales similarly to how its competitors report, more than any other factor, given that the smartphone market has been at least relatively flat for the last two years versus Apple's actual sales figures. However, Zhang's prediction for Rosenblatt is the first to prognosticate bad growth of Services revenue.
Apple is predicting a likely record-breaking holiday sales period, expecting between $88 billion and $92 billion for the holiday quarter. The 2017 holiday season resulted in $88.3 billion in revenue -- a period that analysts badly underestimated iPhone X sales.
Comments
It's growth areas are in the Apple Watch and related health as well as (potentially) home automation and self driving cars. Plus, of course, other products and services that haven't even been thought of -- and that could evolve from the proliferation of 5G revolutionizing communications.
In addition, it could reinvigorate lagging, narrowly focused Mac hardware as well as exploit the power of the A series chips to let iPads challenge laptops in a serious way.
Tim's challenge will be two fold:
1) Keep the innovation coming
2) Keep the innovation customer focused rather than on glitzy tech features.
That second point may be critical if you compare Steve's rollout of the MacBook Air to the recent rollout of the newest MBA: Steve focused on what it (and its technical features) would do for me and you. It was very personal. The girl who introduced the 2018 MBA simply read off a laundry list of technical upgrades and features: When the highlight of your presentation is a T2 chip, its time to rethink your thrust -- at least if you're Apple.
Or, compare the rollout of the 2018 MBA to the introduction of LTE on the Apple Watch: Instead of a list of technical features we got a live shot of a real person making a phone call from the middle of a lake on her paddle board using her Apple Watch. There is a huge difference between the two: one appeals to geeks (like me) while the other appeals to normal humans.
They say “Analysts says “ and then from that point on start preaching their own platform.
Their facts are suspect rumors and conjecture.
News should be reliable and based on facts not fiction. Thank you . Real News Forever !!!!
"Only tell me what I want to hear!"
FTA: "Historically, Zhang has under-estimated not just Apple's actual unit sales, but also the contribution of Services to Apple's bottom line. He was part of the chorus claiming that the iPhone X sales were bad -- which was proven wrong by Apple's actual sales numbers and repeated remarks by Apple that the iPhone X was the best-selling iPhone after release in 2017 and well into 2018."
MBAir being crippled not to pale MB/MBPro says enough. Lamentation has become a second nature, irreversibly & sadly.
Cook has overplayed his strategy.
Apple deserves 10x better than him. Look at Microsoft CEO Sadella as an example.