Apple Bucking Another Analyst Price Target Cut

Andrew Klips  |

Shares of Apple, Inc. (AAPL) are trading higher in early Friday action, swimming against the trend of the broad markets and another analyst posting negative commentary about the tech giant.  Stern Agee said Friday that they are lowering their iPhone forecast, but keeping re-affirming their forecast for iPads and Mac computers.  Stern Agee analyst Shaw Wu, generally an Apple bull, also said the firm is lowering their price target on Apple from $715 to $630.

Stern Agee is lowered its quarterly estimate of iPhone shipments from 35 million to 32.5 million.  UBS (UBS) analyst Steven Milunovich also cut his estimate of iPhone shipments by 1.5 million, putting it in the center of consensus estimates at 35.5 million.

Shaw sees reductions in plan build for the iPhone, which is probably because of an inventory drawdown ahead of product refreshes in the second half of the year.  Shaw said he also sees evidence of build activity for what seems to be for the iPhone 5S and a less-expensive iPhone with a composite casing.

While lowering his price target, Shaw maintained a “buy” rating for the stock, but lowered his revenue forecast for the March quarter from $42.9 billion to $41.3 billion and EPS from $10.25 to $10.  UBS’s Milunovich also has a “buy” rating,  but also cut his price target from $600 to $550.

Full-year estimates for Apple by Stern Agee were also given a haircut from revenue of $187.4 billion down to $180.5 billion in fiscal 2013.  For fiscal 2014, the firm now sees Apple revenue of $206.8 billion, down from the original $213.6 it originally expected.

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Apple has come under plenty of scrutiny lately to maintain its market share, especially with plenty of people squawking about pressure from Samsung, Apple’s main rival who builds its phones on Google Inc.’s (GOOG) Android platform.  Samsung unveiled their new Galaxy 4S on Thursday, which features an even bigger display, a trend that it growing in popularity as more and more people utilize mobile platforms for communication and work.  The Galaxy 4S has a full 5-inch screen, much larger than the iPhone 5’s 4-inch display.

The latest analyst commentary comes on the heels of Jefferies’ analyst Peter Misek cutting his second-quarter iPhone estimate from 37.5 million to 35 million, lowering his price target from $500 to $420 and betting that Apple only has a 75 percent chance of making its guidance for the quarter.

Others to recently chime-in included, but are not limited to, Baird Capital’s William Power concerned about shipments, but maintaining a $465 price target and CLSA’s Avi Silver lowering third quarter estimates and price target from $575 to $505.

In Apple’s first-quarter conference call, chief executive Tim Cook took a minute to address some of the rumors about analysts checking sources for supply chains to try and gauge inventory and orders.   Cook said he would “suggest it's good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary.”

Despite the negativity from analysts, Apple shares are trading ahead by nearly 2 percent Friday morning around $441 per share.

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