AAPL Stock: Apple Analyst Concerned About Growth

Iphone

UBS’ Steven Milunovich on Wednesday reiterated a ‘Buy’ rating on shares of Apple Inc (AAPL), while cutting his price target to $115 from $120, noting the cut reflects Apple’s reduced iPhone estimates.

Cupertino two weeks ago missed Street expectations, and recorded the first iPhone decline in history. Milunovich’s base case for fiscal year 2017 is total iPhone unit growth of 4% to 217 million, based on a 23% upgrade rate and a decline in new customers. The latter seems to echo Bernstein’s analysis. In a note this morning, the firm noted that while it expects the iPhone installed base to grow about 14% in fiscal 2017, many fewer first time smartphone buyers are purchasing Apple’s iPhones than in previous years, reflecting the saturation of the smartphone market. Bernstein has a $135 price target and ‘Outperform’ rating on Apple.

With AAPL stock near 52-week lows, some concerns are clearly priced in following dropping sales of Apple’s flagship device. That said, with estimates needing to fall further, believing all is reflected in AAPL’s PPS seems overly optimistic.

On valuation measures, Apple’s stock it’s trading at a forward P/E multiple of 10.21x, and at a multiple of 9.94x this year’s estimated earnings. The t-12-month revenue at Apple is $234.99 billion. AAPL’s ROE for the same period is 42.71%.

Shares of the $511.70 billion market cap company are down 24.53% year-over-year and 10.22% year-to-date.

Apple Inc., currently with a median Wall Street price target of $120.00 and a high target of $185.00, rose $0.63 to $93.42 in recent trading.

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