Why Did Wall Street Downgrade Apple Stock This Month?

Analysts are wary about iPhone XR shipments

As we’ve learned, Apple (AAPL) stock has been affected by supply chain concerns. The iPhone accounts for 59% of the company’s total revenue and is critical to its long-term growth.

During Apple’s fiscal 2018 fourth-quarter earnings call, CEO Tim Cook stated that the company would stop publishing the device’s sales across all of its business segments going forward. This was when concerns about lower iPhone sales started growing.

Why Did Wall Street Downgrade Apple Stock This Month?

Apple expects revenue of between $89 billion and $93 billion in the first quarter of fiscal 2019. The forecast is below the average revenue estimate of $93.02 billion for the company.

Shortly after Apple reported its quarterly results, Jun Zhang from Rosenblatt Securities downgraded Apple stock from a “buy” to a “neutral.” Zhang has stated that Apple’s higher average selling prices will be unable to offset its weak device sales in the second half of 2019.

Bank of America (BAC) has downgraded Apple stock from a “buy” to a “neutral” driven by its slowing Services revenue and its weaker-than-expected iPhone sales. While Rosenblatt has maintained Apple’s price target of $200, Bank of America has reduced its target price from $235 to $220.

Ming-Chi Kuo slashes iPhone XR estimates

Noted Apple analyst Ming-Chi Kuo has cut the shipment forecast for the iPhone XR by 30% to 70 million units. The trade war between the United States and China (FXI) and competition from Huawei could affect unit sales, according to Kuo.