Apple Inc. (NASDAQ:AAPL) may post fiscal second-quarter revenue that meets its forecast even amid softer demand for the company's iPhones, Mizuho analyst Abhey Lamba said in a research note.
Still, Lamba sees a a risk to Apple's third-quarter revenue guidance, and said the results may miss the mid-point of consensus estimates, he wrote in a note cited by thefly.com. He expects Apple on May 1 to report “fiscal Q2 numbers in-line with guidance.”
The analyst wrote that channel checks pointed to “iPhone X demand softness” in addition to an “incremental downtick” in procurement of the iPhone 8 and iPhone8 Plus.
Capital-Return Program
Apple’s shares have already priced in any upside from the firm increasing its capital -return program, given the incremental cash provided from US tax reform and Apple's pledge to reduce its net cash position to zero over time, the analyst said.
Lamba is keeping a Neutral rating on Apple with a $175 price target, citing what he says is a limited upside to 2018 shipment estimates and a "full" valuation.
Apple fell 1.9% to US$174.45 at 10:15 a.m.
Read:Apple is an 'uninspired investment,' CNBC cites analyst as saying
Separately, Longbow analyst Shawn Harrison said in a note that his contacts reiterated outlooks of flat to as much as 2% growth for Apple's iPhone in both the second quarter and full year.
Even with Apple's likely large future capital returns, the analyst reiterated his Neutral rating on the company's stock.
In the short term "we remain cautious on the iPhone vs. consensus while highlighting that other near-term positives in terms of services growth and accelerated capital are known to investors," Harrison wrote in a note cited by CNBC.
Harrison said even if the company doubled its dividend, it will have more than $40 billion per year of free cash flow to buy back its stock for fiscal 2019, boosted by corporate tax cuts.
Apple will boost OLED tech
Wells Fargo analyst Aaron Rakers wrote in a client note seen by thefly.com that Apple will probably expand organic light-emitting diode (OLED) technology and introduce it to “additional models.”
Apple’s iPhone X boasts an OLED screen touted as the future of smartphones because they’re crisper and easier on batteries than their liquid-crystal predecessors.
The analyst said investors should maintain a “cautious view” on “forward demand rivers/upgrades/elasticity” in Apple's iPhone installed base in fiscal 2018.
The analyst reiterated a Market Perform rating and US$195 price target on Apple, according to thefly.com.
Budget LCD iPhone may start at US$550
Apple may launch two versions of a rumored 6.1-inch LCD iPhone later this year, according to KGI analyst Ming-Chi Kuo.
In a note to investors seen by AppleInsider, Kuo says Apple may be planning a dual-SIM dual standby or DSDS-capable LCD iPhone with two physical SIM card slots and no eSIM support.
A second LCD variant will be outfitted with a traditional single-SIM arrangement and could sell for between US$550 and US$650. Based on the new bottom-tier pricing, a DSDS model may cost between US$650 to US$750, the analyst said.