UPDATE: Societe Generale Downgrades Apple on Near-Term Uncertainty
In a report published Monday, Societe Generale analyst Andy Perkins downgraded the rating on Apple (NASDAQ: AAPL) from Buy to Hold, but reiterated the $500.00 price target.
In the report, Societe Generale noted, “It is clearly good news that Apple has sold more new handsets than it was expecting. However, changes to forecasts are likely to be fairly minimal as the new guidance is still within the limits of the guidance previously given in July. It is therefore likely that the higher sales of the 5s and 5c models came at the expense of the 4S model which remains on sale. In fact, what is key is the margin achieved on the handsets. We calculate that gross margins on handsets fell from a peak of almost 60% at the beginning of 2012 to 37% in the June quarter. We had assumed that Apple was able to prevent margins falling further, and forecast 42% margins for the next two years. However, if demand remains strong for the new products, then Apple may be able to begin increasing margins once again. However, this is far from clear at the moment and so we are sticking to our current forecasts for now.”
Apple closed on Friday at $467.41.
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