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Gene Munster Cuts iPhone Estimates By 10%

Gene Munster Cuts iPhone Estimates By 10%
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  • The share price of Apple Inc. (NASDAQ: AAPL) has dropped 20.08 percent over the past six months, declining to a low of $96.45 on January 7.
  • Piper Jaffray’s Gene Munster has maintained a Buy rating on the company, with a price target of $179.
  • Munster believes that iPhone sales were declining, and lowered his iPhone sales estimates for the first and second quarter of 2016.

Analyst Gene Munster has lowered the estimate for iPhone units from 62.5 million to about 55 million for 1Q16, representing a 10 percent decline from 1Q15.

For 2Q16, Munster has reduced the iPhone sales estimate from the earlier 48.5 million to 45 million, representing a 5 percent decline from the same period in 2015.

Related Link: Munster: Apple Still Worth $179

The estimate revisions appear to be based on recent supply chain data, which revealed that orders had been cut, as well as the lackluster earnings guidance from some of Apple’s suppliers in recent weeks.

“While Apple has repeatedly stated in the past that the changes in orders from any given supplier are not indicative of the health of the iPhone business overall, we believe that the combination of three supplier guidedowns as well as the Nikkei story suggesting production cuts from last week are too much collective evidence to not adjust iPhone expectations,” Munster stated, as noted on Business Insider.

Munster also mentioned that the consensus expectations for iPhone sales in the March quarter represent an 18 percent year-on-year decline at 50 million units. Apple is expected to guide to revenue of $54-56 billion for the March quarter, compared to the current consensus expectation of $57.9 billion.

Latest Ratings for AAPL

Jan 2017OTR GlobalDowngradesNegative
Jan 2017GuggenheimInitiates Coverage OnBuy
Dec 2016PiperJaffrayAssumesOverweightOverweight

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