Market Overview

Analyst Says Apple's App Store Spending Is Likely To Slow In 2019

Share:
Analyst Says Apple's App Store Spending Is Likely To Slow In 2019

Apple Inc. (NASDAQ: AAPL) has stumbled out of the gates in 2019, and the latest date from App Annie suggests negative commentary from analysts about an Apple slowdown may be right on the money.

App Annie Projections

App Annie is projecting global app store spending will surpass $120 billion in 2019, up from $101 billion in 2018. The red flag, however, is the 18.8 percent projected growth rate, well below the roughly 32 percent average growth rate over the past two years.

“We expect App Store spending to continue to slow in 2019 driven in part by China games,” Macquarie said Thursday. They said Alphabet, Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) app store Google Play will be mostly immune from the China weakness.

Macquarie downgraded Apple from Buy to Neutral earlier this month after Apple lowered its first-quarter guidance. On Thursday, Macquarie reiterated its $149 price target.

Baird’s Take

Baird analyst William Power also issued cautious commentary on Apple ahead of its fiscal Q1 earnings report.

Power said full-year 2019 earnings expectations may still be too high given the difficult environment. He said the seasonal Q2 decline in iPhone sales could be deeper than usual this year. Consensus estimates are calling for about a 37.3 percent sequential decline in iPhone sales in fiscal Q2, but Power said Baird models are suggesting an even softer number.

“We remain positive long-term on AAPL's ecosystem benefits, impressive services growth and strong cash flow, but we would be more cautious near-term until estimates are more fully reset,” Power wrote in a note.

Power reiterated his Outperform rating and $185 price target for Apple.

Price Action

Apple stock traded down about 1 percent Thursday to $152.33. The company is expected to report fiscal Q1 earnings Jan. 29 after the market close.

Related Links:

Kerrisdale: Qualcomm Ruling Could Cut 'Stock Price In Half'

Morgan Stanley Breaks Down Qualcomm's Best Legal Strategy With Apple

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2019Credit SuisseInitiates Coverage OnNeutral
Apr 2019Bank of AmericaReiteratesBuyBuy
Apr 2019HSBCDowngradesHoldReduce

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: App Annie App Store BairdAnalyst Color Reiteration Top Stories Analyst Ratings Tech Best of Benzinga

 

Related Articles (AAPL + GOOG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ALVKeyBancDowngrades0.0
PEPMorgan StanleyReiterates137.0
AZRXH.C. WainwrightMaintains7.0
PEPMacquarieMaintains138.0
POLBuckinghamMaintains36.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Q4 Earnings Preview For AbbVie

51 Stocks Moving In Thursday's Mid-Day Session