Apple Analyst Sees Soft Holiday Quarter Weighing Down On Stock But Thinks One Data Point Offers Glimmer Of Hope
Portfolio Pulse from Shanthi Rexaline
KeyBanc Capital Markets analyst Brandon Nispel maintains a Sector Weight rating on Apple Inc. (AAPL), citing concerns for a weaker-than-expected holiday quarter. Apple's hardware revenue is projected to grow 38% sequentially in the December quarter, below the historical average of 62% and consensus estimate of 41%. KeyBanc's First Look Data indicates a 27% month-over-month increase in indexed spending, which is also below the three-year average of 37%. However, iPhone sell-through met store expectations, with strong demand for the iPhone 15 Pro/Max and solid demand for the regular 15/Plus. Despite this, KeyBanc's data suggests below-average growth for Apple's fiscal Q1 2024. Apple's stock is considered fairly valued, trading at 18.3x 2025 adjusted EBITDA, and is expected to perform in line with the Nasdaq.
January 10, 2024 | 11:57 am
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Apple Inc. is expected to have a softer holiday quarter with hardware revenue growth below historical averages, according to KeyBanc. While iPhone sales are in line with expectations, overall growth is projected to be below average for fiscal Q1 2024.
The KeyBanc report suggests a mixed outlook for Apple, with weaker hardware revenue growth but solid iPhone sales. The stock is considered fairly valued, which may limit significant stock price movement. The report's impact is neutral to slightly negative due to the mixed signals, but the analyst's rating and the comparison to historical performance and consensus estimates suggest caution.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 100