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Barclays Lowers Apple's Price Target From $121 To $115, Sees Near-Term Pressure

Barclays Lowers Apple's Price Target From $121 To $115, Sees Near-Term Pressure
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Smartphone demand continues to be weak, while inputs from the supply chain do not indicate an above-market performance for Apple Inc. (NASDAQ: AAPL), Barclays’ Mark Moskowitz said in a report. He maintained an Overweight rating on the company, while reducing the price target from $121 to $115.

End market conditions remain challenging, with low demand for smartphones, while Apple is unlikely to deliver an above-market performance. Moskowitz reduced the iPhone unit estimates for the June quarter and the September quarter from 40.9 million to 39.9 million and from 46.6 million to 43.9 million, respectively.

The iPhone unit estimates for 2016 and 2017 have been lowered from 212.1 million to 203.7 million and from 233.8 million to 224.4 million, respectively. The revised unit estimate for 2016 implies a y/y decline of 12 percent, while that for 2017 implies 10 percent y/y growth.

Impact On Stock Performance

Apple’s shares could come under pressure in the near-term, since consensus estimates are likely to be reset lower, Moskowitz commented. He stated, however, that the “pain could be short-lived,” since the shares are likely to recover in the lead up to the new iPhone model launch later this year.

“We still expect the next mega cycle to be C2017, though, when Apple skips to IP8 with major form factor changes, meaning more volatility could persist in the stock after the initial IP7 rollout,” the analyst added.

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Latest Ratings for AAPL

Oct 2016Credit SuisseMaintainsOutperform
Oct 2016UBSMaintainsBuy
Oct 2016Goldman SachsMaintainsBuy

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