Apple’s Ability To Surprise From Here Seems Limited, Says Deutsche Bank
In a research report released October 2, Deutsche Bank analyst Sherri Scribner downgraded Apple (NASDAQ:AAPL) shares from a Buy to a Hold rating with a $102 price target, as Apple’s shares are up 25% year-to-date and near all-time highs, driven by positive expectations for iPhone and Sept’s new product announcements.
Scribner noted, “We believe investor expectations for iPhone sales are currently high, making it more difficult for Apple to outperform expectations. In addition, the company has now announced all of its anticipated new products, creating limited catalysts for the shares through year-end. With expectations already reflecting strong iPhone sales and limited catalysts this year, we expect shares to be range bound.”
The analyst continued, “We believe expectations for sales of the iPhone 6 and iPhone 6 Plus are high and that it will be difficult for Apple to outperform these expectations over the next two quarters. Many investors we have spoken to mention a large installed base of 4S phones which should drive a strong refresh cycle, as well as upside from new carrier relationships in China. We have adjusted our estimates higher to reflect strong sales of the new iPhones, but we believe Apple will have a difficult time meeting optimistic expectations, which we believe are higher than our estimates. In addition, we expect supply constraints to put some limit on unit shipments of new iPhones through year-end.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Sherri Scribner has a total average return of 11.1% and a 64.1% success rate. Scribner has a 13.8% average return when recommending AAPL, and is ranked #430 out of 3315 analysts.