Apple gets price target, estimate cut

iPhone 5 sales continue to be a hot topic on Wall Street.

By TheStreet Staff Jan 16, 2013 3:27PM

Businessman in car with smartphone copyright Image Source, Image Source, Getty ImagesBy James Rogersthestreet logo

 

Wall Street is still talking about Apple's (AAPL) iPhone 5 sales, and on Tuesday Nomura Equity Research cut its estimates and price target for the tech giant.

 

Citing "signs of weaker-than-expected" iPhone 5 sales, Nomura cut its iPhone unit estimates for fiscal year 2013 by 5% to 157 million from 166 million. For fiscal 2014, the research firm slashed its estimate by 8% to 184 million iPhones from 199 million.

 

Nomura, which also cut its Apple price target to $530 from $660, lowered its December quarter iPhone sales estimate to 48 million units from 50 million and its March quarter prediction to 39 million from 43 million.

 

Shares of Apple and some of its key partners came under pressure on Monday following a Wall Street Journal report that the tech giant has cut iPhone component orders because of "weaker-than-expected" demand during its January to March quarter.

 

While the report was greeted with skepticism by TheStreet's Rocco Pendola and Chris Ciaccia, Apple's stock reacted nonetheless, falling 3.5% during Monday trading.

 

Shares of Apple were recovering Wednesday, up over 4% to $507.46 during afternoon trading.

 

Nomura analyst Stuart Jeffrey warned in a note released on Tuesday that Apple's near-term catalysts appear weak.

 

"Launch of iPhone 5S or iPad mini with Retina display could be positive but seems unlikely to materially boost demand," he wrote. "iOS7 launch may prove more critical (likely due in June), but recent management changes [at Apple] may limit extent of enhancements."

 

Jeffrey added that the benefits of the rumored deal between Apple and China Mobile may not be felt until 2014.

 

In its note on Tuesday, however, Nomura raised its iPad unit estimates from 19.2 million to 21 million for the December quarter, and from 18.2 million to 20.6 million for the March quarter, boosted by demand for the iPad Mini. For fiscal 2013, the equity research specialist hiked its iPad forecast from 79.9 million to 89.6 million.

 

Nomura forecast Apple fiscal 2013 and 2014 earnings of $45 a share and $50 a share, respectively. Analysts surveyed by Thomson Reuters expect the iPhone maker to report earnings of $48.46 a share and $56.82 a share, respectively.

 

Nomura also cut its Apple revenue forecast for fiscal 2013 and 2014 from $188.34 billion to $182.98 billion and from $212.4 billion to $207.18 billion, respectively. Analysts surveyed by Thomson Reuters are looking, respectively, for $191 billion and $219.89 billion.

 

"We are more cautious than sell-side forecasts for revenue and gross margin, mostly driven by our expectation that iPhone gross margins and ASPs are unsustainably high," wrote Jeffrey.

 

Apple has not yet responded to TheStreet's request for comment on the rumor of weakening iPhone demand.

 

 

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4Comments
Jan 16, 2013 5:26PM
avatar

I can`t tell you how many people would love to buy apple`s stock if they split

the stock.Nobody wants to buy 5 shares.

Jan 16, 2013 4:58PM
avatar
 Values?? VALUES!!??? Love is a value. Hate is not. You are on the wrong side of history and humanity. Beside what does your backwards opinion have to do with chicken wings? 
Jan 16, 2013 5:23PM
avatar

Market Maker crooks caused a "flash crash" of CLSN stock today on absolutely no news and expected great news. I filed a complaint with the feds re these crooks and others did also, as poster below.

 
Wednesday, January 16, 2013 3:58:00 PM
Re: The_Bull Post # of 7537 
This was a standard MM move to clear the stops. LVL III shows all those stops sitting out there. When a stock runs up like CLSN has a lot of people put stops out there to "protect" themselves.

When the overhang gets large enough, the MM's find some pretext to trigger the first series of stops which create market orders. They use those market orders to move the price down to trigger the next series of stops until they have removed the overhang and built up a nice reserve of shares which they sell on the rebound after all the stops are cleared out.

As others have reported here, it happens predictably.
The wise investors have buy orders sitting out there way below the current price to capture this event.


Always impressive when it happens.
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