By Brian Swint
Apple shares were falling in Friday’s premarket after the company reported earnings. Analysts said that a lack of new products was an issue as well as the slump in China, a key market for the iPhone maker.
“Both the Americas segment and China segment came in below expectations, and we do not believe the dynamics are likely to change in the near term, ” said KeyBanc analysts led by Brandon Nispel. “This, paired with Apple’s still premium valuation and limited growth, suggests that Apple is likely to be range-bound and perform in line with the Nasdaq at best.”
KeyBanc gives Apple stock a rating of Sector Weight, without a price target.
The shares fell 2.4% to $182.44 in early trading. Coming into the session, the had dropped 5.8% over the past three months, though they’re still up 21% from a year ago.
Piper Sandler was also pessimistic about Apple’s chances to boost its stock soon. “We remain on the sidelines at this time and are looking for a cleaner handset growth environment,” said Piper Sandler’s team led by Harsh V. Kumar. It has a price target of $190 and Hold rating.
D.A. Davidson’s target is $166, with a Neutral rating. “In order for the company to see meaningful growth in current and new products, it will require them to get unstuck on the product innovation-front,” said analyst Gil Luria.
Apple just released its first new product in almost a decade, the Vision Pro headset. While it isn’t expected to contribute meaningfully to earnings this year, the Vision Pro is arguably the largest product innovation under CEO Tim Cook.
CFRA said the China numbers aren’t that bad and could be compensated for in other regions. “Although China’s softness implies share loss, growth across the rest of Asia, installed base rise, and sustained +10% Services growth are good health indicators,” said analyst Angelo Zino. CFRA gives the stock a target of $210 and a Hold rating.
Raymond James is also optimistic, giving Apple an Outperform rating at $195 price target. Our “valuation is justified in our view given the unparalleled ecosystem, double-digit Services growth, and solid margin execution,” said analysts led by Srini Pajjuri.
Other big technology stocks were also moving Friday. Microsoft, which just overtook Apple as the biggest U.S. company by market capitalization, was up 1%. Amazon jumped 6.1%. Nvidia added 1.4%. Meta Platforms, the parent company of Facebook was up 17%, while Alphabet, the parent of Google, was up 0.6%.
Write to Brian Swint at brian.swint@barrons.com