Apple (NASDAQ: AAPL) stock fell 2% in intraday trading Tuesday after a Wall Street firm downgraded its estimates for the March quarter. The adjustment followed sales-channel checks indicating reduced iPhone sales and a softening market in China.
Apple Inc. (AAPL) is confronting significant headwinds, leading Needham analyst Laura Martin to reduce her estimates for the company’s fiscal second quarter. However, she maintained her buy rating on AAPL stock.
In a client note, Martin highlighted Apple’s “anemic and/or negative growth outlook” and anticipated cost increases for funding GenAI (generative artificial intelligence) as key factors deterring potential investors from purchasing AAPL shares.
The channel checks revealed lower-than-expected iPhone sales. However, this was partly offset by slightly stronger revenue from iPad and Mac computer sales.
Martin expects Apple to report hardware sales of $67.60B for the March quarter, reflecting a 9% year-over-year decline. In addition, she estimates that service sales will reach $23.30 billion, reflecting an 11% increase. Martin forecasts iPhone sales of $46.60B, down 9% year over year.
She is forecasting Apple’s earnings per share at $1.51, marking a 1% decrease, with total sales amounting to $90.80B, down 4%, for fiscal Q2. Analysts polled by FactSet have similar expectations, with a consensus forecast of $1.51 earnings per share on sales of $90.7 billion. Apple will announce its fiscal Q2 results on May 2.
Martin also cut her revenue and earnings targets for Apple for the current fiscal year and the next.
Apple (NASDAQ: AAPL) Stock Price Action
At the time of publication, AAPL stock has dropped 1.92% compared to the previous trading session, trading at $169.38. The traders have exchanged hands with 72,944,052 (72.94 million) shares versus the average daily trading volume of 61.96 million.
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