Analysts bearish on demand for new iPhones this fall, estimate Apple shares could fall 30%

Apple’s iPhone was a big hit last year, but analysts believe the new iPhone models to be released this fall may not be very innovative, which could soften demand for the iPhone.

According to New Street Research, demand for the iPhone was strong last year, but the new model this fall may only be a minor upgrade, and the demand outlook is weakening, and the target price for Apple shares was cut accordingly, from $135 to $90 per share, the lowest rating on Wall Street, which means Apple shares may fall nearly 30% from the current price.

Apple shares fell 0.5% to close at $124.61 per share on Friday the 28th.

In previous years, Apple has updated its iPhone lineup every fall, and last year’s launch of Apple’s first 5G smartphone, the iPhone 12, has generated strong expectations, with demand still booming during the spread of the new pneumonia epidemic, helping iPhone sales surge 66 percent in the January-March quarter this year, with strong demand generally expected to continue into at least the next few quarters.

New Street Research analyst Pierre Ferragu released a research report on the 28th, pointing out that the next-generation iPhone 12 phone launched by Apple this fall – tentatively called “iPhone 12s”, also It may be called the iPhone 13 – may only be a small improvement, not as strong as last year’s iPhone 12, which may lead to a softening of demand. He used this as a reason to downgrade Apple’s stock investment rating from “neutral” to “sell” and predicted that earnings will decline in the future and Apple’s stock price could fall 20 to 30 percent.

Ferragu believes that as the epidemic recedes and the economy restarts, consumer spending on electronic devices will largely decrease, and the launch of the new iPhone in the fall may cause a “flat or even lukewarm” response from the market. He believes that the September quarter and the December quarter, iPhone sales may not meet market expectations.

He pointed out that according to Wall Street’s current consensus forecast, iPhone sales are expected to reach 234 million units in the current fiscal year (until September 2022), up 2% from the consensus forecast for fiscal 2021; however, he believes that in order to achieve this goal, the new iPhone launched this fall must be the most attractive phone in Apple’s history, but he thinks that is unlikely.

Ferragu predicts that iPhone shipments face “significant downside risk” and could be at least 15 percent lower than Wall Street’s consensus forecast at this point, which is somewhere between 180 million and 200 million units.

According to data compiled by Bloomberg, there are only two companies on Wall Street that have given Apple stock the equivalent of a “sell” rating, and New Street is one of them. A total of 34 companies on Wall Street have given Apple an “in” rating, 9 have rated it “neutral” and only 2 have given it a “sell” rating, with an average target price of $156 per share.