This Japanese Think Tank Downgraded Apple To Outperform

Apple Inc. AAPL is likely to witness modest growth of the iPhone in FY17-18, Daiwa Securities’ Yoko Yarnada said in a report. She downgraded the rating on the company from Buy to Outperform, with a price target of $117, following the run-up in shares.

Apple reported 14.6 percent year-over-year sales decline, with gross profit margin at 38 percent and EPS down 23 percent. iPhone channel inventory declined. Moreover, the iPad business generated revenue growth for the first time in 10 quarters, Yarnada noted.

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Apple projected a 7.9 percent decline for the July-September period, with gross profit margin at 38.2 percent, EPS expected to decline by 14.5 percent.

Although the earnings forecast for Apple has been reduced, the firm's one-year price target is $117. The price risk factor is currently worse than expected in the smartphone market, Yarnada commented. There are new models being launched and significant changes in the presentation and development. She also cited the supply and demand environment, and changes in management policy.

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