The coronavirus outbreak continues to take a toll on global stocks and Apple (NASDAQ:AAPL) hasn’t been spared. The stock fell 3.2% on Thursday. The Dow Industrial Average declined by 3.58% on the same day. Meanwhile, the S&P 500 fell by 3.39% and the tech-heavy Nasdaq Composite declined by 3.10%.
Apple stock takes a hit, Deutsche Bank lowers targets
Apple stock also took a hit after Deutsche Bank cut its earnings and target price for the stock. Now, Deutsche Bank expects the coronavirus situation to cause more damage to Apple’s sales in the current quarter. The bank expects Apple to report an EPS of $2.69 on revenue of $60.4 billion in the March quarter. Previously, the bank forecast an EPS of $2.99 on revenue of $65.1 billion.
The coronavirus outbreak has curbed travel, forced stores and offices to shut down, and disrupted the global supply chain. In China, the epicenter of the outbreak, business activities have slowed down and factories are struggling to run normally. Foxconn, the company that manufactures Apple products like the iPhone, doesn’t expect to run its factories in China at full capacity until the end of March. Apple might not have enough supplies to meet the demand for its products.
In addition to Foxconn’s struggles to resume normal operations, Apple also closed its stores in China for several weeks. The company closed stores to help keep the coronavirus from spreading. Closed stores meant lost sales opportunities for the company. As a result, Apple warned that it may not hit the revenue target of $63 billion–$67 billion that it set in January.
Deutsche Bank lowered its earnings expectations and cut its target price for Apple stock. The bank maintained its “hold” rating on Apple stock. However, Deutsche Bank slashed its target price for the stock to $295 from $305.
Things don’t look that ugly
Apple wrapped up 2019 on a positive note. Overall, the stock gained 86% last year. Apple stock also had a strong start in 2020. The stock gained more than 10% in January. However, the spreading coronavirus impacted investors’ sentiment in Apple stock. So far, the coronavirus has wiped out Apple’s early gains in the year.
Looking past the coronavirus, there’s still a lot for investors to like about Apple. The company continues to put big money back into shareholders’ pockets through share repurchases and dividends. Apple is within striking distance of its target to generate about $50 billion in services revenue, which would allow it to reduce its reliance on iPhone sales.