Toni Sacconaghi: ‘People don’t want iPhones this cycle’ (video)

Bernstein’s top Apple analyst says the next cycle won’t start before late 2020.

Found in the CNBC archives from May 1. Missed it the first time around.

From Sacconaghi, defending his underwater valuation: 

I don’t want to detract any credit from what Apple has done with the services business. They’ve built a $40-plus billion dollar business that’s growing in the mid-teens, which is a real testament to execution and their vision for what this business can be. That said, if your profits are down 16% you have a business that’s intrinsically cyclical.

Cyclically, people are saying, this is not a phone at this price that we want this cycle.

Maintains Market perform rating and $190 price target.

My take: Toni Sacconaghi can argue it round or flat.


  1. David Emery said:

    He might be right. But not with THIS reasoning: “That said, if your profits are down 16% you have a business that’s intrinsically cyclical.” It takes a lot more data to establish a cycle!

    We know in the course of a single year the business is cyclic, peaking in December and troughing in the summer. But to argue cycles over several years, and in particular the notion of a lengthening cycle, does not depend on a single significant drop. Maybe someone should go back and review his MBA notes from statistics.

    May 15, 2019
  2. Fred Stein said:

    His facts are wrong. He claims top line and GM and operating margins are in decline for five years. Looking Philips famous five easy pieces, shows a different story for topi line, and looking at EPS, AAPL looks better.

    Hi posits that all hardware will decline in absolute dollars as much or more than services grows. Maybe, maybe not. If Apple just gets into selling refurbed iPhones (with the help of Daisy), that’s enough to pull the net metrics to positive. If Apple carves out a few niches in healthcare, they can create more growth. Apple’s growth in Apple Pay is phenomenal, but from tiny base. Adding Apple Card, will accelerate that category for years.

    Toni’s argument that Apple’s P/E ration is at a peak is not true anymore.

    May 15, 2019
  3. Tommo_UK said:

    Toni Sacconaghi’s analysis – as usual trying to fit a flat pancake into a round hole and being surprised when it falls apart at the seams. “Top” analyst my arse. He’s always been top nincompoop when it comes to Apple. He missed everything from the iPod to the Apple Stores to the iPhone. The only thing he’s consistently top of is the scrap heap.

    May 15, 2019

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