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Susquehanna: We're Trimming Our iPhone Estimates, Too

Susquehanna: We're Trimming Our iPhone Estimates, Too
  • Shares of Apple Inc. (NASDAQ: AAPL) have gained 1.82 percent since the start of 2015.
  • Chris Caso of Susquehanna Financial Group maintained a Positive rating on Apple's stock with an unchanged $155 price target.
  • The analyst suggest that Apple's iPhone sales will likely come in "modestly below market expectations."

Chris Caso of Susquehanna Financial Group returned from a trip to Asia where he visited with key smartphone suppliers, distributors, and manufacturers.

According to Caso, the tone in Asia was "more upbeat" than it was over the past six moths as conditions "stopped getting worse." In addition, a decline in bookings that was observed in the summer appears to have been "fairly short lived."

Caso said the environment in Asia suggests that smartphone handset units in China is not likely to grow in 2016. As such, Apple's iPhone sales are "likely to come in modestly below market expectations." Accordingly, the analyst is cutting his iPhone sales estimates based on the "visibility we received from the supply chain."

Related Link:This Report Says iPhone Supply Chain Orders Have Weakened, And It's Sending Apple Shares Lower

Caso revised his iPhone shipment estimate for the December quarter to 70 million from a prior 75 million. The analyst also lowered his March quarter iPhone estimates to 55 million from a prior 58 million.

Caso did, however, suggest that the Street's iPhone estimates were "too high in the first place."

The analyst also noted his contacts said they expect to receive a production update over the next few weeks and it is possible that it may consist of production cuts. He added that is likely Apple suffered excess inventory that accumulated during the fourth quarter – which "isn't a good sign."

"As such, we expect some degree of uncertainty to persist over the next few weeks," Caso stated.

Caso joins a small handful of Wall Street analysts, including JPMorgan's Narci ChangBarclays' Mark Moskowitz and Morgan Stanley's Katy Huberty, who all revised their iPhone estimates lower.

Latest Ratings for AAPL

Dec 2019Initiates Coverage OnBuy
Dec 2019MaintainsOverweight
Nov 2019ReiteratesBuy

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Posted-In: Chris Caso iPhone iPhone Estimates iPhone Supply Chain Susquehanna Financial GroupAnalyst Color Analyst Ratings Tech Best of Benzinga


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