Goldman Sachs analysts reiterated their “sell” rating on Apple.
Goldman Sachs analysts say Apple may be on the verge of reporting strong earnings last quarter, but that’s not enough to guarantee a bright outlook for the stock.
Goldman Sachs analyst Rod Hall reiterated his “sell” rating on Apple on April 14, saying that the current iPhone replacement cycle is more of a typical redesign cycle than the “super cycle” the market is expecting. Hall has been bearish on Apple since April of last year.
As a result, we expect iPhone replacement rates to resume a sustained decline in 2021,” said Hall, “especially in the second half of this year.
The basis of our bearish Apple assumption is that the average iPhone price forecast remains roughly unchanged this year as consumers shift to lower-priced iPhones, a situation that is clearly starting to appear in supply chain orders,” Hall said.
The New Crest Pneumonia (CCP virus) outbreak has limited people from traveling and eating out, meaning they may have more money to spend on electronics, but Hall predicts that the shift to outdoor spending could be a negative factor for Apple’s stock price as countries begin to reboot their economies.
Hall is also concerned about Apple’s continued cutbacks in production orders and consumers’ continued shift to lower-priced iPhones, two things. In a more short-term perspective, he believes Apple is poised to deliver bright shopping season earnings, supported primarily by strong consumer demand, particularly from the two main groups of work-at-home and online learning.
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