• JP Morgan Cuts 2016 iPhone Estimates Due to Supply Chain Concerns



    This past week, JP Morgan Chase advised investors that it’s reducing near-term forecasts for iPhone sales. Though JP Morgan remains “overweight” on Apple, the firm reduced its March quarter iPhone estimates by 8% or 4.9 million units. Hall now sees Apple shipping 55 million iPhones in the three-month span which would be a decrease from the 61 million iPhones the company sold in its March 2015 quarter. Analyst Rod Hall noted that he still sees AAPL stock as “attractive,” advising investors to use any “weakness” in the stock in early 2016 as an opportunity to increase holdings if possible.

    Similar to others who also reduced estimates in the recent days, Hall was prompted by Apple suppliers, who have indicated some weakness heading into the coming quarters. To be more specific, Hall mentioned that comments made by Dialog Semiconductor suggest the March quarter could be weaker than what was previously expected. Low numbers from Taiwan Semiconductor Manufacturing Co. have prompted a “cautious” view for the proceeding June quarter.

    As far as the June 2016 quarter, Hall’s estimates remain untouched, calling for Apple to ship 51 million iPhones in the three-month span. He believes any weaknesses could be offset by demand for a new, lower priced 4-inch iPhone model which is rumored to be in the works. When it comes to Apple’s fiscal 2017, Hall is more bullish, assuming the company sticks to its schedule and offers a next-gen “iPhone 7.” He sees the iPhone shipments returning to 7% growth reaching 251 million units while the average selling prices are projected to decline 4% to $624.

    Last but not least, Hall reduced his estimates for sales of the Apple Watch to 23.5 million in fiscal year 2016. That’s a reduction of 6.5 million from his previous estimate. Despite these reductions, JP Morgan has maintained its $145 December 2016 price target on shares of AAPL. Even though, analysts have been reducing estimates, many are standing by Apple as a solid investment going forward. Investors do remain concerned that the current iPhone 6s cycle may not drive continued growth for the smartphone platform though. For its part, Apple has advised investors to not read too much into supply chain data for years.

    We’ll have to see how Apple does and how correct the analysts are by just waiting.

    Source: JP Morgan via AppleInsider
    This article was originally published in forum thread: JP Morgan Cuts 2016 iPhone Estimates Due to Supply Chain Concerns started by Akshay Masand View original post
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