Apple’s target price
In the last few weeks, many brokerage firms have cut Apple’s (AAPL) target price. Last month, Goldman Sachs (GS) slashed Apple’s 12-month target price from $209 to $182. Goldman Sachs cut the target price due to lower-than-expected demand for the iPhone XR and slowing demand for Apple products in China (FXI). On December 4, analysts at HSBC downgraded Apple’s rating to a “hold” from a “buy.” HSBC thinks that Apple’s hardware growth will be stagnant.
In the last few weeks, Apple’s suppliers reported weak results. Cirrus Logic (CRUS), Qorvo (QRVO), and Lumentum (LITE) all reported weak guidance for the current quarter. Largan Precision of Taiwan, which supplies camera lenses for smartphone makers including Apple, reported an ~29% decline in its revenues in its latest earnings report.
On December 13, Piper Jaffray cut Apple’s target price from $250 to $222 for the next year, according to CNBC. The report said, “While we are not seeing evidence of iPhone unit weakness in our domestic iPhone user survey, reduced expectations from multiple component suppliers are likely a sign that global unit uptake has not met expectations.”
Investors will be watching Apple’s actual earnings results for the second quarter of fiscal 2019. Apple is expected to announce its earnings results by the end of January.