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 While several brokerages reduced their price targets in response to
reports of slowing shipments of the iPhone 6S and 6S Plus, they
backed their mostly upbeat recommendations.
The most bearish of the six brokerages lowering their targets on
Friday was Cowen and Co, which cut its target to $125. Still, that's
nearly 30 percent more than where the stock was trading on Friday.
Apple's shares were up 2.2 percent at $98.58 by noon, snapping a
three-day losing streak. The median price target of $145 calls for a
nearly 50 percent increase in the stock price.
"We continue to view the near-term softness in iPhone units as the
result of tough comparisons rather than a change to the secular
growth rate," BMO Capital Markets analysts wrote in a note. The
brokerage cut its price target on the stock to $133 from $142.
Nevertheless, China remained a concern, at least for the near-term.
Apple counts China as one its biggest markets and the recent
economic tumult in the world's second-biggest economy is likely to
hurt the company.
"I think they have seen some incremental weakness in China," Cowen
analyst Timothy Arcuri said.
Cowen was among the three brokerages that lowered their iPhone
shipment estimates.
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Analysts now expect Apple to increase revenue this year by less than
4 percent on average. This is a far cry from the 28 percent achieved
in the fiscal year that ended in September.
Still, more than 80 percent of the analysts have a "buy" or higher
recommendation on the stock.
Driving some of the optimism is the launch of iPhone 7, expected in
the second half of the year.
"We continue to view the risk/reward on AAPL positively as we
anticipate growth in the (iPhone 7) cycle, which should drive stock
appreciation through 2016," Pacific Crest Securities analysts wrote
in a note.
Users of older iPhones upgrading to the iPhone 7 could boost sales
by 40 million units in 2017, the brokerage said.
(Reporting By Lehar Maan in Bengaluru; Editing by Saumyadeb
Chakrabarty)
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