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Citi And Morgan Stanley Cut Apple’s 12-Month Target Price


Dec. 11 2018, Published 8:05 a.m. ET

Stock returns

Currently, Apple (AAPL) shares are trading at $169.60. The stock is trading 27% below its 52-week high of $233.47. The shares have declined close to 25% since the beginning of October, which indicates a return of 1.7% since the beginning of 2018.

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Citi lowered Apple’s target price

Citi (C) was the latest investment bank to be cautious about Apple. Citi reduced Apple’s 12-month target price to $200, which indicates that the stock could fall more to $125. While Citi expects Apple to meet its revenue guidance in the first quarter of fiscal 2019 (year ending in September), it might be at the lower end of the company’s sales guidance between $89 billion and $93 billion.

Citi has stated that Apple seems to have over-anticipated the demand for its latest iPhone devices—the iPhone XS and iPhone XR. The older iPhones are attractive to customers at a lower price point.

The ongoing trade war between the US and China might also impact Apple stock, according to Citi. China accounts for 18% of Apple’s total sales. The tariff war might reduce the demand more.

If Apple’s sales for fiscal 2019 fall 2%–3% year-over-year, Citi has predicted that Apple shares could fall to $125.

Morgan Stanley (MS) also lowered Apple’s target price to $236 from $253 due to lower demand from China. The other investment banks that lowered Apple’s target price over the last few months are UBS, Guggenheim Securities, Goldman Sachs (GS), HSBC, and Rosenblatt Securities.


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