Slowing consumer spending and macroeconomic headwinds are likely to pressure Apple in the near term, a Wall Street analyst said Tuesday. Apple stock hit a nearly one-year low on Monday.
Deutsche Bank analyst Sidney Ho reiterated his buy rating on Apple stock but cut his price target to 175 from 200.
On the stock market today, Apple stock rose 0.7% to close at 132.76. On Monday, it fell 3.8% to 131.88, its lowest close since late June 2021. For the year, Apple stock is down more than 25%.
"Considering the macro environment (rising interest rates, slower consumer spending, and continued geopolitical uncertainties) in the past 1+ month, we do think risk to our estimate is to the downside, and we would not be surprised to hear more chatter about Apple cutting orders," Ho said in a note to clients.
Apple Stock Valuation Lowered
Ho noted that Apple already gave cautious commentary for the June quarter.
On April 28, Apple warned that supply constraints caused by Covid-related disruptions in China and industrywide silicon shortages would reduce its revenue by $4 billion to $8 billion in the June quarter. Foreign currency exchange rates and stopping shipments to Russia during its war with Ukraine are other headwinds.
Investors are lowering Apple's valuation in the face of macro uncertainties, Ho said.
Elsewhere on Wall Street, JPMorgan analyst Samik Chatterjee reiterated his overweight rating on Apple stock with a price target of 200. He is bullish on Apple's prospects because of its growing services business. Those services include Apple Music, Apple TV+, Apple Fitness+ and Apple Arcade.
Apple stock has a middling IBD Composite Rating of 66 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
