Apple Inc. (NASDAQ:AAPL) shares are down around one percent today, trading at $109 and change as of 1:40 PM ET, after Pacific Crest’s Andy Hargreaves lowered his price target on the name to $127 from $129, citing ‘uninspiring’ iPhone 7 demand. The analyst also wrote in his note distributed to clients on Monday that while he believes Apple stock remains “too cheap”, rating it an “overweight”, he sees demand as “stable, but uninspiring”. Channel checks into demand and supply suggest the iPhone 7 cycle is “OK, but not great, the analyst contended.
Other issues that Hargreaves sees with Apple stock include a strong greenback, Trump’s possible trade policies, and the possibility that the upcoming iPhone 8 which might cost more than older iPhones, hurting Apple’s margins. Based on these perceptions, Hargreaves reduced his 1Q17 and full fiscal year 2017 iPhone estimates to 77 million and 225 million, respectively, which is roughly in line with consensus. The analyst also said he expects Apple stock to be range-bound in the near term.
Hargreaves warns Apple stock could see upside depending on details about the next iPhone cycle, which according to early reports might come equipped with an OLED screen as well as other new features. The iPhone 8 is also reportedly going to come in three models: one curved 5.8-inch OLED model and two thin-film-transistor liquid-crystal display models. Apple’s prime handset is also expected to feature wireless charging for the first time, along with glass-backed cases rather than the same aluminum housing we have seen in the last few gens of iPhones.
Meanwhile, concerns about the possibility of Cupertino reducing its iPhone 7 handset orders as the initial sales momentum have begun to fade keep gaining steam with another report this morning from boutique firm BlueFin Research Partners saying that its “most recent Apple supply chain update shapes [the firm’s] view into early 2017 as one of build cuts and an air of uncertainty.”
“Accordingly, we are adjusting our view from Postive to Cautious near term,” they note, adding “We think the stock will be under pressure until the reduced demand levels in 2017 are better understood.”
Apple Stock Action
Apple Inc is currently valued at more than $583 billion and has a median Street price-per-share target of $133 with a high target of $185. Approximately 26.5 million shares changed hands on Monday, compared to the stock’s average daily volume of 37.83 million.
In the past 52 weeks, shares of the tech giant have traded between a low of $89.47 and a high of $119.86 with the name’s 50-day moving average (MA) and 200-day MA located at $112.27 and $105.97 levels, respectively. Additionally, shares of Apple trade at a P/E ratio of 1.40, and have a Relative Strength Index (RSI) of 43.37.
Apple stock currently prints a one year loss of about 2.5 percent, and a year-to-date return of around 7 percent.