RBC trims Apple target

From a note to clients Tuesday snagged by TheFly:

RBC Capital analyst Amit Daryanani lowered his price target on Apple to $235 given the “sustained datapoints” suggesting that the iPhone demand is waning.

The analyst states that he sees a “high probability” that the company may have already reflected the negative datapoints into its Q4 outlook, but expects investors to wait for the “noise level” to stabilize before turning more positive in spite of the 21% decline in its stock price since last reporting results.

Daryanani also keeps his Outperform rating on Apple given its “strong balance-sheet, aggressive buyback, and ability to drive gross margins higher”, adding that historically, the cuts in the supply chain have been more severe than the trends for the company.

Maintains Outperform rating, lowers price target to $235 from $240. 

My take: That $240 target was set four weeks ago. Five weeks before that RBC was at $250. Those “sustained datapoints” do wear you down.


  1. Gregg Thurman said:

    Watching WS stumble all over themselves trying to blame their target cuts illustrates just how focused they are on iPhones, to the exclusion of the other 40% (and rapidly growing) of the Company.

    TC and LM were spot on in their decision to stop reporting units. WS is being forced to consider the Company as a whole. Imagine that.

    I believe the last step in weaning WS off of units will be reported revenue that exceeds top of guidance by at least 1%.

    November 27, 2018
    • Fred Stein said:

      Good points.

      We have to wait for the real fun when these analysts try to predict this quarter’s results. They have to come up with numbers not rumors and opinions. Then they have to consider how many Watches, iPads, and new Macs Apple sold rather than the XRs that maybe Apple didn’t sell.

      November 27, 2018
    • Mark Visnic said:

      ” …. illustrates just how focused they are on iPhones.”

      Agreed. I know it’s all about the precious, painstakingly built DCF model for most analysts but it nonetheless is fascinating (in a perverse way :/ ) few of them can make the adjustment and see the bigger picture that appears to be clear.

      November 27, 2018
  2. Fred Stein said:

    Here we go again. Analyst lowers target to match the price action.

    That said, global issues will almost certainly impact Apple’s financial performance. Dropping his target by 2% is no big deal.

    November 27, 2018
    • Dan Scropos said:

      How is the Forex headwind looking at this point?

      November 27, 2018
      • Gregg Thurman said:

        ~7% higher than January through May.
        ~2% higher than June through September.
        But ~7% lower than December quarter 2016.

        I really don’t see a significant issue here (Maestri guided impact ahead of earnings), not like 2016 when it became an issue after the fact.

        I personally believe Apple’s December guidance is more conservative than usual in anticipation of WS’s reaction to no more unit announcements.

        My revenue estimate is $93.325 Billion.

        November 27, 2018
  3. Gregg Thurman said:

    Rather simplistic but my estimates in the future will adjusted to historical performance against revenue guidance, with net income based on average of past several years’ percent of revenue. Without firing up the Mac mini I think that’s about 20.50%.

    Divide net income by share estimate for EPS.

    I’m going to do this until I figure out something better/more accurate.

    November 27, 2018

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