Apple shares weaken after warning of sluggish holiday quarter

Apple Stocks eased Friday after a U.S. jobs report boosted expectations the Federal Reserve will hold off on raising interest rates, driven by forecasts for a shorter holiday quarter.

The stock was down 1.5 percent in early trading, having fallen more than 3 percent before the bell. If the losses were sustained, the world’s most valuable company was set to lose $40 billion (about Rs 3,32,630 crore) in market value.

iPhone Manufacturers on Thursday forecast sales for the holiday quarter that typically fell short of Wall Street estimates, blaming weak demand. ipad And wearable,

The estimate has fueled fears about widespread holiday demand, including estimates from the US National Retail Federation and Deloitte that predict the slowest sales growth in the key shopping period in years due to sticky inflation.

“Apple’s revenue growth has stalled over the past few quarters — and is likely to remain flat next year,” brokerage Bernstein said, adding that the holiday quarter typically sets the tone for Apple’s fiscal year that runs through September.

However, stocks got some support when data showed nonfarm payrolls rose less than expected in October, lifting stocks across the board on hopes that the Fed could end its rate-tightening cycle.

At least 14 analysts cut their price targets on Apple, dropping the average price target to $195, according to LSEG data. Apple is currently trading at about 26 times its 12-month forward earnings estimates, the lowest among the so-called “Magnificent Seven” stocks.

“We view management’s flat sales guidance as evidence that the company can’t rely on iPhone sales to prop up shares, as it has in the past,” said DA Davidson analyst Tom Forte.

Sales of iPhone, Apple’s main revenue generator, rose in the September quarter and are projected to register growth in the last three months of 2023 as well.

CEO Tim Cook also emphasized this iPhone 15 The models fared well in China, as they tried to allay Wall Street’s fears that Apple was losing market share to a resurgent. huawei And other local smartphone vendors. “In mainland China, we set a quarterly record for the September quarter for iPhone,” Cook told Reuters.

Many analysts appreciated the comment. “The Street will breathe a sigh of relief on this front,” said Wedbush Securities analyst Dan Ives.

© Thomson Reuters 2023

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