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The analysts told investors in a note that the firm expects Apple’s March quarter to be in line as better iPhone revs offset weaker Macs and Services, but they expect a guide down for the June quarter “with revenue declining by LSD Y/Y.” However, they noted that it’s not clear that it matters for the stock.
“We are rationalizing estimates for June-Q as we cut forecasts by 3% across the top and bottom line,” the analysts wrote. “We now model June-Q revenue at $80B, down 4% Y/Y, vs. Street at $84B (up 160bps Y/Y). We model 43M units for iPhone for June-Q, 3M below Street at 46M. Our Asia supply chain checks indicate weakening demand across key hardware categories, especially with deteriorating IP14 pro model demand for June-Q.”
“Downbeat commentary from Hon Hai and TSM (both guiding June-Q revenue declining Y/Y) also echo the weaker-than-expected June-Q outlook for AAPL as wide-ranging order cuts continue.”
The analysts also stated that at a ~30% premium to the S&P 500, the firm sees the stock valuation as rich.
“Along with the weaker consumer spending backdrop, we believe we are witnessing the catch-up from strong Covid performance across product categories. Service revenues have been decelerating as well. We see pressure to estimates and potentially PE multiple in 2023,” they added.
