4 Pressing Questions About Apple's Slumping Stock

Apple Inc. AAPL investors hoping that the unveiling of the new iPhone 8 and iPhone X this month would propel the stock to new all-time highs have been sorely disappointed. Instead, Apple stock is now down more than 7 percent since Apple’s iPhone event on Sept. 12.

4 Pressing Questions, Answered

IPhone bulls are now left with a lot of questions about the stock In a new note to clients Monday, Bernstein analyst Toni Sacconaghi provided answers to four of the most pressing questions about Apple:

1. What the heck is going on with Apple stock?

According to Sacconaghi, sentiment related to Apple stock has taken a hit due to three negative headlines since the iPhone launch. First, the Apple Watch 3 has gotten bad reviews. Second, rival Alphabet Inc GOOG GOOGL bought HTC’s Pixel business for $1 billion, which some see as a threat to Apple. Finally, initial iPhone 8 preorder numbers have been on the soft side.

2. Is plenty of iPhone 8 supply a bad thing?

Sacconaghi said investors shouldn’t get too worked up about iPhone 8 availability. He said Apple may simply be building as much iPhone 8 supply as possible before it pivots to iPhone X production in coming weeks (see his track record here).

3. Are there any near-term positive catalysts to stop the bleeding?

Sacconaghi said iPhone X preorder numbers in late October, margin guidance for fiscal Q1 and a potential press release on the first 24 hours of iPhone X sales could all serve as bullish near-term catalysts.

4. When will fiscal 2019 become a concern?

Sacconaghi said it will take at least until the March quarter for investors to get a clear picture of the current iPhone cycle and its potential impact on the 2019 cycle.

Bernstein maintains an Outperform rating and $175 target for Apple.

Related Link: Why Apple Investors Shouldn't Worry About This Sell-Off

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasPrice TargetReiterationAnalyst RatingsTechTrading IdeasBernsteiniPhone 8iPhone 8 PlusiPhone XiPhonesToni Sacconaghi
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!