Apple Stock Drops Once Again After Downgrade
Yet another downgrade sends the stock down.
Ming-Chi Kuo (analyst at TF International Securities) is the most followed analyst of Apple stock (NASDAQ: AAPL). We tend to see Apple stock price move up or down quite significantly after Ming-Chi Kuo makes a call. Today, the analyst said that demand for iPhones much lower than it should be.
Kuo’s note said that “2019 iPhone shipments likely to be under 190 million units.” This means that demand is less than FactSet’s estimate of 212 million iPhone’s shipped out over 2019. The note caused Apple share price to fall by 3.2 percent on Friday. This quarter, Apple shares have fell by 26 percent after a series of high-profile downgrades.
In the note, Kuo details lower demand for the new iPhone XR is responsible for the underperformance. He followed on by saying “The increase in orders of legacy iPhone models cannot offset the decline of XR and XS series shipments because of the low season impact.”
To finalize his note, Kuo said that he expects to see iPhone units sales falling by 5%-10% from 2018 – which is news that investors should not welcome. Kuo is arguably the most accurate Apple analyst on Wall Street as he has strong sources among companies that supply Apple with parts.
For investors, the drop in Apple stock price has exposed a strong entry point. If Apple stock trades at $150, it can make 50 percent more buybacks than if it was trading at $230. This is a huge benefit for Apple as it intends to continue with its buyback program. In the last 12-months, Apple has lowered its share volume by 6% due to buybacks. Since starting its buyback program, Apple has decreased its share volume by 23.3 percent. With the amount of money that Apple intends to spend on share buybacks, it could have bought-out entire companies. Apple could have bought T-Mobile or Tesla with the money that is going into its buyback program.
Apple Share Price Forecast
Apple shares are heading into their eleventh week in the negative. With many analysts cutting forecasts and demand for Apple’s most important product decreasing, we have seen selloffs and price drops. The iPhone made up over 60 percent of Apple’s 2018 revenue, which explains why one product out of the company’s lineup can make such a significant impact on the Apple share price.
Our analyst gives Apple stock 12-month forecast of $225.00.
City Of Hype analysts give Apple stock “BUY” rating.