Apple Inc.’s iPhone business normally heats up in the fall when the company announces its new smartphone models, but one analyst sees a rocky road between now and then.
Loop Capital Markets analyst Ananda Baruah downgraded Apple’s stock
AAPL,
to hold from buy Monday, warning that the company’s current quarter could prove disappointing.
Baruah said that Apple cut its June-quarter estimates for iPhone builds and shipments by about 10% over the weekend, something he thinks brings “material downside risk” to revenue estimates for the period.
Apple didn’t immediately respond to a MarketWatch request for comment on whether it has cut its build expectations.
In Baruah’s view, a cut to iPhone builds would be the second negative signal in the past few weeks. Apple Chief Financial Officer Luca Maestri said on the company’s earnings call earlier in May that the company expected similar year-over-year revenue performance in the June quarter to what it saw in the March quarter. That suggests revenue of less than $81 billion for the period, which was below the consensus view prior to Apple’s report.
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“The next few months will be choppy to be sure,” Loop Capital managing director John Donovan said in a separate note over the weekend.
Looking to the all-important September and December quarters, Baruah said that Apple’s shipment outlook appears to be intact, and although “the risk has increased, it could eventually be lowered.”
He sees some mixed data points on business, noting that Apple seems to be aiming for a greater variety of new smartphones when the iPhone 15 arrives relative to what it saw in the past few iPhone cycles, though the company appears to have brought down its expectations for what portion of September- and December-quarter iPhone sales would come from new models.
Apple’s stock was down 0.5% shortly after Monday’s open.
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