© Reuters Apple (AAPL) downgraded on revenue contraction, not seen returning to growth till 2024
PhillipCapital analysts downgraded Apple (NASDAQ:) to Accumulate from Buy, and lowered his price target on shares to $183 from $186, citing “weakness due to product revenue facing challenges from the macro conditions.”
In their latest note on the company, the analysts took a closer look at the company’s recently reported : while acknowledging AAPL’s beat on both top and bottom lines, they note that the biggest takeaway from earnings is the guidance for continued revenue contraction through 2023: “Apple guided YoY revenue performance in 3Q23 to be similar to that of 2Q23, implying a potential contraction of 2%-3%, with FX expected to be a headwind of 4%.”
The analysts believe the modest guidance is justified by the current macro conditions as well as the state of iPhone, the tech giant’s biggest revenue generator, as “customers are likely to defer their purchases until the expected iPhone 15 launch in September.”
They thus adjust the “forecast from marginal revenue growth to a revenue contraction in FY23,” and only see the company returning to growth in 2024, “due to the pent-up demand as a result of the deferred purchases,” as they downgrade shares to Accumulate from Buy, and lowers the price target to $183 from $186.
Shares of AAPL closed at $173.57 on Friday, and are up nearly 39% YTD.
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