Apple Inc. (Nasdaq: AAPL) is just days away from clearing up all the market noise and setting the record straight on its iPhone sales numbers. Apple stock took a beating last week, falling more than 4 percent on a new wave of negative iPhone commentary from Wall Street analysts, but the common theme among those analysts seems to be that the iPhone numbers don’t necessarily matter.
Without citing a source, Nikkei reported Monday that Apple has notified suppliers that it will halve its iPhone X production target to around 20 million units.
And BTIG is suggesting that Apple’s fiscal second-quarter guidance could come up well short of consensus estimates when the company releases its quarterly earnings on Feb. 1. BTIG analyst Walter Piecyk says Apple’s current quarter revenue guidance could be as low as $60 billion, $8 billion short of consensus estimates.
“We reduced our [fiscal second-quarter] revenue estimate by $2.5 billion primarily based on a seven million reduction in the number of iPhones we expect to be sold to 53 million,” Piecyk says in a research note. Yet Piecyk, like most other analysts, remains bullish on Apple’s stock in the long term.
In fact, among the 37 analysts currently covering Apple stock, “buy” and “overweight” ratings outnumber “sell” and “underweight” ratings by a count of 28-0, according to the Wall Street Journal. So while some analysts have warned Apple shareholders of a potential bump in the road this week, long-term investors should understand few people are stepping up and suggesting it’s time to sell Apple stock.
In fact, GBH Insights head of technology research Daniel Ives says Apple investors are currently in a “hand-holding period” of negative commentary and media coverage that will ultimately have minimal impact on Apple’s long-term outlook.
“We believe the combination of stronger than expected [average sales prices], a ‘push out’ of roughly 15 to 20 million iPhones from fiscal 2018 into fiscal 2019, repatriation/buyback tailwinds, multiple device launches on the horizon, and a China growth story which is showing signs of renewed growth prospects gives us confidence that Apple will be able to navigate near-term headwinds and emerge a stronger fundamental story exiting 2018,” Ives says.
Even Piecyk says Apple investors should keep its potentially weak quarterly numbers in perspective.
“Our estimate of 11 percent revenue growth may be notably lower than consensus, but it’s still impressive for a company at Apple’s size and margin profile,” he says.
BTIG has…
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