Apple Inc (NASDAQ:AAPL) is still a stock to buy, but it’s not what it used to be, according to a report from Canaccord Genuity (TSX:CF, LSE:CF).
Analysts at the firm maintained a “Buy” rating for the stock but lowered its price target to $170 per share, down from $200, in a report released Tuesday. Apple shares traded nearly flat at $135.70 Wednesday afternoon.
The reason for the downgrade is skepticism about Apple’s start to 2023.
“While production of the higher priced iPhone 14 Pro and 14 Pro Max improved exiting the December quarter, we maintain our below consensus estimates for Q1/F2023 and full year F2023,” analysts wrote.
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“While we believe demand is solid and some of the lost December quarter sales will help March results ... With the overall concerning macro backdrop for consumer spending on higher-priced devices, we have reduced our overall hardware estimates for F2023 and F2024 with most of the reductions stemming from our lowered iPad and Mac estimates.”
Canaccord projects iPhone revenue of $68.3 billion in the first quarter, below the FactSet consensus of $69.3 billion, and $199.6 for fiscal 2023, below the consensus of $205 billion.
That said, it’s not all doom and gloom. For one, Canaccord Genuity (TSX:CF, LSE:CF) pointed to Apple’s $49 billion in net cash, along with the ongoing 5G upgrade cycle.
“With the 5G upgrade cycle still likely to benefit iPhone sales longer-term combined with other hardware categories growing the installed base and mix of new subscribers to drive faster growth for high-margin services, we reiterate our Buy rating,” analysts wrote.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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