Infuriate Street is buzzing over what Apple’s latest financial denouements and poor iPhone sales numbers mean for the stock.
Apple turn up weaker-than-expected December-quarter iPhone unit sales on Thursday. The company also emitted a lower-than-expected revenue forecast for the March quarter.
Here is what the analysts erased in their notes to clients after the report.
1) Bank of America Merrill Lynch
“In our way of thinking, the unit growth was indisputably weaker (and our estimates for unit growth sooner a be wearing come down although ASPs remain robust) but the stock has a backstop from the players’s ability to opportunistically buy back stock equivalent to 20% of the market capitalization.”
“The verdict is in – the iPhone X/8 circle is disappointing. … While Apple may launch a huge buyback, bracing earnings for the next several years, we wonder if that is already priced into the stale, and note that Apple’s longer term tax rate is likely to proliferating from FY 18 levels.”
3) Deutsche Bank
“From our perspective, the pity living quarters was a mixed bag, with the lower sales outlook and declines in iPhone portions offset by higher iPhone ASPs and the potential for significant capital compensations over time. The quarter had enough of both positives and negatives to follow the bulls and bears firmly in their own camps for now. Our view of Apple as a mty stock is unchanged and we believe shares are likely to trade within their verifiable range.”
“We believe investors are beginning to accept that the modish iPhone cycle will not be significantly stronger than the last one. The Apple investment opinion has shifted from one of product-led growth to predictable cash generation and shareholder proffers. While we grow incrementally negative on the defensibility of the iOS ecosystem, Apple’s liquidate pile makes downside risk very limited.”
5) Nomura Instinet
“We have faith Apple compensated for soft F1Q X demand by restoring channel inventory to assess earlier than is typical. While this resulted in weak top-line advisement for F2Q, tax reform allowed EPS to rise.”
6) Citi Research
“We are convinced that susceptibility on Apple stock in the past few weeks swung too far negative and the negative agency news of order cuts added fuel. We believe the negativity is go too far and the majority of our thesis remains unchanged.”
“Fundamentals aren’t exposing incremental improvement but that likely takes a back seat. Dec-Q developments and Mar-Q outlook don’t signal any sort of iPhone super cycle, but Apple’s commentary on bringing net moolah to zero could bolster investor enthusiasm for a major capital renewal event. This potential catalyst could be a near-term boost for the heritage. Eventually fundamentals will matter, and we are cautious on the iPhone franchise dollop drive above-peer growth.”
“Notably, the company expects to run a zero net specie balance over time, implying significant capital returns to the n-t. Taken together, we see limited upside on fundamentals with support to the downside from topping return.”
9) KeyBanc Capital Markets
“Soft iPhone sell-through urges a saturated market and the lack of gross margin upside reduces our vision of potential profit growth. This reduces our view of potential upside in the old and prompts the downgrade to Sector Weight.”
The company’s shares dropped 4.4 percent Friday.
— CNBC’s Michael Bloom provided to this story.