Apple Stock: Growth Outlook Called Anemic To Negative

Apple stock fell Tuesday after a Wall Street firm lowered its estimates for the company’s March quarter following sales-channel checks that showed lower iPhone sales and weakness in China.

Apple is known as the world’s most valuable company, but the multi-trillion-dollar tech behemoth is seeing slower growth. Apple stock has essentially only kept pace with the S&P 500 since August 2020, and the consumer electronics giant may no longer be the apple of investors’ eyes. Experts say there’s no growth story for Apple, and investors are looking for the next catalyst. So are the company’s glory days over?” vid-name=”Apple Stock Is Not The Money Tree It Once Was. What Will Make It Grow?” vid-cat=”Industry Insights” vid-date=”10/30/2023″ vid-date-tmsp=”1698669751″ vid-image=”https://www.investors.com/wp-content/uploads/2023/10/r9pm9WPQ-640×360.jpg” vid-authors=”MEREDITH HEYMAN”>
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Needham analyst Laura Martin cut her estimates for Apple’s fiscal second quarter, but maintained her buy rating on Apple stock. She noted that the consumer electronics giant faces significant headwinds.

“Apple’s anemic and/or negative growth outlook, along with expected cost increases to fund GenAI (generative artificial intelligence), are the biggest gating factors preventing new investors from buying AAPL, based on our conversations,” Martin said in a client note.

The channel checks showing lower iPhone sales were partially offset by slightly higher-than-expected revenue from iPad and Mac computer sales.

Apple Stock Down Year-To-Date

For the March quarter, Martin predicts Apple will report hardware sales of $67.6 billion, down 9% year over year, and services sales of $23.3 billion, up 11%. Martin is forecasting iPhone sales of $46.6 billion, down 9% year over year.

She is modeling Apple earnings per share of $1.51, down 1%, on total sales of $90.8 billion, down 4%, for fiscal Q2. Analysts polled by FactSet are looking for earnings of $1.51 a share on sales of $90.7 billion. Apple will report its fiscal Q2 results on May 2.

Martin also lowered her Apple revenue and earnings targets for this fiscal year and next.

On the stock market today, Apple stock declined 1.9% to close at 169.38. Martin has a price target on Apple stock of 220.

Year to date, Apple stock is down 12%. Meanwhile, the S&P 500 index is up 5.9%.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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