Friday , October 22 2021

Apple Edges lowers as Goldman Sours on iPhone forecasts, and lowers the target price


Share of Apple Inc. (AAPL) was lower on Tuesday after Goldman Sachs analysts reduced their estimates for the sale of the iPhone and the fiscal sale of this technology giant in 2019.

Goldman lowered sales forecast for the entire iPhone & # 39; to 6% and cut its revenue forecast by 3.5%, after one of Apple's major suppliers, Lumentum Holdings (LITE), issued a profit warning on Monday that almost a third of this Manufacturer's market value component and resulted in a 5% drop for Apple, which led the Dow Jones Industrial Average to 500 points. Goldman also reduced its target price on Apple to USD 209 from USD 222 per share.

"We are afraid that the demand for new models of the iPhone &" 39; is getting worse ", analysts Goldman wrote. "While Apple may have already considered some weaknesses in its guidelines, we believe that the time and volume of LITE reduction suggests … worse and worse data on demand."

Yesterday, Apple shares fell 0.2% to $ 193.77. The shares sold modestly earlier in the session.

Lumentum, which supplies 3D chips for the Apple iPhone's face recognition system, said its current quarterly sales increase will range from $ 335 million to $ 355 million, while EPS unrelated to GAAP will reach the range of $ 1.15 to $ 1.34, well below the initial guidelines from USD 405 million to USD 430 million and USD 1.60 to USD 1.70 respectively, which were issued only 11 days earlier.

"We recently received from one of our largest industrial and consumer customers an order for laser diodes for 3D sensors that significantly reduced the number of shipments to them in the second fiscal quarter in the case of previously placed orders that were originally intended to be delivered during the quarter," he said. CEO Alan Lowe. "Thanks to our proven ability to deliver large quantities, many years of experience, hundreds of millions of devices in the field and a new product and path for customers, we remain confident in our leading position in the emerging market of laser diodes for 3D detection."

Yesterday, another Apple provider, Japan Display, which produces LCD screens, lowers sales forecast and profit margins after publishing a sixth running operating loss of 4.7 billion yen (US $ 413 million) for three months ending in September.

Last week, Apple shares were hit by a report from a Nikkei journalist who said key Taiwan suppliers said Foxconn and Pegatron were asked to stop new production capacity until they gained more clarity on the demand of the iPhone XR from Apple.

The reports were in line with Apple's decision not to provide detailed sales numbers for individual products, such as the iPhone and Macs, which means that investors will no longer be able to calculate the average selling price, which is a key indicator used to assess the company. profitability.

The decision to abandon these guidelines, as well as forecasts for sales in December in the quarter of USD 91 billion in the three months ending December, overshadowed the stronger than expected September quarter, which brought better than expected profits of 2.91 USD per share and the group's revenues amounted to $ 62.9 billion, and shares fell by more than 6.3% on Friday, which is the largest one-day decline since 2014.

"Lack of transparency is disappointing and will probably reduce the visibility of the investor in the company," said Tim Long from BMO Capital Markets. "We believe that individuals may not grow at all, and while (average selling prices) are still growing, they will become stable at some point."

Apple launched the 6.1-inch LCD version of its iPhone, the XR, at around $ 750 in early September, as a cheaper alternative to the more expensive iPhone XS, XS Max, which price starts from $ 1000 and $ 1,100.

"Although we do not expect the new line to increase the volume of units to the levels observed during the iPhone 6 cycle, due to the mature smartphone market, revenues should continue to be very healthy, due to the continuous increase in average selling prices, with customers of the iPhone & # 39 for mid-range customers who are likely to upgrade to XR and premium buyers who are likely to opt for a new iPhone and XS Max (the best models cost $ 1450), "said the analyst at Trefis.

Apple reported that in the three months that ended in September, it changed 46.9 million iPhones, which was largely in line with analysts' forecasts, but was flattered by a much stronger than expected average sales price of 793 USD, which was the peak of the consensus of 751 USD and increased by 28.3% compared to the same period last year.

Revenues from the sale of services, including the App Store, Apple Music, iCloud Storage and Apple Pay sales, increased 27% to $ 10 billion, but slowed from 31% recorded in the quarter in June, which was eased by the slower pace of sales of the iPhone & # 39; That reduces the so-called installed base.

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