Skip to main content

Market Overview

Apple's Stock Dips Lower After Goldman Sachs Lowers Price Target To $165

Share:
Apple's Stock Dips Lower After Goldman Sachs Lowers Price Target To $165

Apple Inc. (NASDAQ: AAPL) expansion into streaming video could have a "material negative impact" on earnings.

The Analyst

Goldman Sachs analyst Rod Hall maintains a Neutral rating on Apple with a price target lowered from $187 to $165.

The Thesis

Apple is marketing its new streaming video service Apple TV+ with a free one-year trial. While Apple's service costs $4.99 a month, the company will account for the trial as a $60 discount to a combined hardware and services bundle, CNBC quoted Hall as saying in a note.

Hall said Apple's accounting method shifts revenue from hardware to Services even if customers don't perceive themselves as paying for the streaming video service. This could give an advantage to Apple's services revenue line, but it's "equally inconvenient" for hardware average selling prices and margins high sales quarters, especially the December-ending period.

Apple's accounting method is in no way improper and the company has taken a "very similar approach" in the past. Nevertheless, the math behind the accounting method points to a potential negative 7% impact on fiscal first quarter and full year 2020 average selling prices.

Hall's revised price target is now the lowest forecast of all major Wall Street banks and the fifth lowest of all analysts who cover Apple's stock, according to TipRanks.

Price Action

Shares of Apple were trading lower by 1.2% Friday at $220.30.

Related Links:

Analyst: Comparing Apple TV+ With Netflix Isn't Fair

Option Traders Making Large Bullish Bets On Apple Following iPhone 11 Event

Latest Ratings for AAPL

DateFirmActionFromTo
Feb 2021RBC CapitalAssumesOutperform
Jan 2021DA DavidsonMaintainsBuy
Jan 2021Deutsche BankMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

 

Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: Apple TV CNBC Goldman SachsAnalyst Color Price Target Top Stories Analyst Ratings Tech Best of Benzinga

Latest Ratings

StockFirmActionPT
NIUDaiwa CapitalInitiates Coverage On41.5
QMCONorthland Capital MarketsInitiates Coverage On12.0
IBKRJefferiesInitiates Coverage On89.0
MRETFTD SecuritiesDowngrades18.5
SWKSGoldman SachsDowngrades135.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com