Apple Stock extends slide as BofA downgrades rating, cuts price target

Apple Inc. (AAPL) Shares extended their decline Thursday after Bank of America analysts lowered their rating and price target on the world’s most valuable tech company, citing falling consumer demand and weak reception for the new iPhone. 14.

BofA Global Research analyst Wamsi Mohan beat his Apple price target by $25 to $160 per share, while reducing his rating to “neutral” stock as he anticipated significant negative revisions in estimates” for its short-term earnings.

Mohan noted what he called a “weaker iPhone 14 cycle,” facing elevated risks to global consumer spending, decelerating gains in services revenue, a return to pre-COVID demand levels for iPads and Macs and the headwinds of the soaring US dollar.

“Apple stocks have significantly outperformed this year and have been seen as a relative safe haven,” Mohan said in a client note. “However, we see a risk to this outperformance over the next year…due to weaker consumer demand.”

Apple shares were down 2.62% in premarket trading to show an opening price of $145.77 each.

Earlier this week, Bloomberg reported that Apple had asked suppliers and assemblers to scale back plans to ramp up production of the new iPhone 14 to 6 million units, opting instead to pursue a target of 90 million – roughly in line with last year’s tally and its early summer forecast – for the second half of this year.

This follows a cautious outlook from its main assembler, Foxonn, which expects current-quarter smartphone revenue to remain flat compared to last year, citing “geopolitics, inflationary pressure and the Covid pandemic”.

Apple declined to provide a detailed September quarter revenue forecast after its better-than-expected third-quarter results in late July, but said overall revenue growth would likely outpace gains in the three months through June.

Apple said strong Chinese demand, along with a moderate supply chain impact, helped iPhone revenue rise 2.8% from a year ago to $40.67 billion. in the June quarter, just ahead of Street’s forecast of $40.5 billion.

Overall, Apple earned more than $19.44 billion for its fiscal third quarter, as revenue rose 2% year-over-year to $82.96 billion, just ahead of analyst estimates of $82.88 billion.

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