Oppenheimer: Apple Downgraded, Analysts 'Questioning' Their Faith
Apple Inc. (NASDAQ: AAPL) reported its F2Q16 total revenues down 33 percent sequentially and iPhone shipment down 32 percent, while announcing weaker-than-expected guidance. Oppenheimer’s Andrew Uerkwitz downgraded the rating for the company to Perform, citing expectations of the weaker performance seen in the current quarter to continue till the iPhone launch in 2017.
The revenue estimates for FY16 and FY17 have been reduced from $229.1B to $215.0B and from $251.5B to $222.0B, respectively. The EPS estimates for FY16 and FY17 have been reduced from $9.18 to $8.34 and from $10.44 to $9.04, respectively.
The iPhone shipment estimates for FY16 and FY17 have been reduced from 215.8M units to 208.0M units and from 233.0M units to 212.5M units, respectively. The updated iPhone shipment estimates imply 10 percent y/y shipment decline in FY16 and 2 percent shipment growth in FY17, analyst Andrew Uerkwitz noted.
Faith In Apple Shaken
Apple has a low valuation, robust cash flows, a strong balance sheet, and healthy recurring revenue opportunity from its active installed base. Uerkwitz wrote, however, “We like Apple as a company, but less so as an investment. We believe investors will question if the “best times have passed” or if “Apple can innovate no more”.”
The analyst believes that Apple’s shares may have limited upside until the new iPhone adopts more VR-friendly features. He added, “Such belief leads to our more bearish outlook for the coming iPhone cycle (“iPhone 7") and has us look past favorable longer-term trends.”
Latest Ratings for AAPL
|Jan 2017||Guggenheim||Initiates Coverage On||Buy|
|Oct 2016||Goldman Sachs||Maintains||Buy|
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