Rosenblatt analyst Jun Zhang is chiming in on Apple Inc. (NASDAQ:AAPL) from the sidelines, as he believes iPhone sales in China have declined 6% YoY in November. Furthermore, Zhang expects this downward trend will continue as iPhone 7 orders drop and component orders have already been adjusted down.
Therefore, the analyst reiterates a Neutral rating on AAPL with a price target of $102, representing a 17% downside from where the stock is currently trading.
Looking ahead, Zhang predicts a decline in demand, specifying that iPhone 7 A10 orders will drop to 41 to 42 million units, and A10X orders for the new iPad Pro will circle 8 to 9 million units for the March quarter. In regards to suppliers, Zhang notes, “We expect some Apple component orders to decline 40% QoQ.”
On a positive note for the tech giant, the analyst explains, “Some noise of Apple increasing orders might come from the iPad instead of the iPhone since we believe Apple might launch three new iPad Pro models next March quarter.”
According to the analyst, retailers already began to discount the iPhone 7 in November by ($50). For now, the analyst expresses disappointment in the iPhones 7’s dipping sales in China, concluding, “Overall, we believe iPhone sales in China are still weaker than retail channels expected.”
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, analyst Jun Zhang is ranked #3,991 out of 4,274 analysts. Zhang has a 25% success rate and forfeits 18% in annual returns. When suggesting AAPL, Zhang loses 8.1% in average profits on the stock.
TipRanks analytics exhibit AAPL as a Strong Buy. Out of the 31 analysts polled by TipRanks, 26 are bullish on Apple stock, while 5 remain sidelined. With a return potential of 14%, the stock’s consensus target price stands at $132.75.