Apple stock fell Tuesday after a Wall Street firm lowered its estimates for the company's March quarter following sales-channel checks that showed lower iPhone sales and weakness in China.
Needham analyst Laura Martin cut her estimates for Apple's fiscal second quarter, but maintained her buy rating on Apple stock. She noted that the consumer electronics giant faces significant headwinds.
"Apple's anemic and/or negative growth outlook, along with expected cost increases to fund GenAI (generative artificial intelligence), are the biggest gating factors preventing new investors from buying AAPL, based on our conversations," Martin said in a client note.
The channel checks showing lower iPhone sales were partially offset by slightly higher-than-expected revenue from iPad and Mac computer sales.
Apple Stock Down Year-To-Date
For the March quarter, Martin predicts Apple will report hardware sales of $67.6 billion, down 9% year over year, and services sales of $23.3 billion, up 11%. Martin is forecasting iPhone sales of $46.6 billion, down 9% year over year.
She is modeling Apple earnings per share of $1.51, down 1%, on total sales of $90.8 billion, down 4%, for fiscal Q2. Analysts polled by FactSet are looking for earnings of $1.51 a share on sales of $90.7 billion. Apple will report its fiscal Q2 results on May 2.
Martin also lowered her Apple revenue and earnings targets for this fiscal year and next.
On the stock market today, Apple stock declined 1.9% to close at 169.38. Martin has a price target on Apple stock of 220.
Year to date, Apple stock is down 12%. Meanwhile, the S&P 500 index is up 5.9%.
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