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Apple (AAPL): ‘Barometer’ of Suppliers Points to Weaker 2Q Sales, But No Worries, Says Top Analyst


Monness analyst Brian White today reiterates a Buy rating on Apple (NASDAQ:AAPL) with a $235 price target, writing that sales in the month of May for a collection of electronics companies he calls the “Apple Monitor” — because some substantial portion of their business is supplying Apple — were inline with the average May performance of up 5% over the past thirteen years.

However, White noted, “With two months of sales results for our Apple Monitor reported, and assuming average MoM sales performance in the month of June, we estimate 2Q:CY18 sales for our Apple Monitor will fall by 2% QoQ, well below the average June quarter increase of 12% over the past thirteen years.”

“We are not concerned by this trend. Given a much weaker than seasonal sales performance in 1Q:CY18 (after a strong H2:CY17) that resulted in a very depressed revenue base in March for our Apple Monitor, it should be no surprise that the sequential performance in 2Q:CY18 would remain unfavorable, even after a better than seasonal monthly performance in April and an inline print in May,” the analyst continued.

White pounds the table for Apple’s stock: “After the unveiling of new software innovations at WWDC last week, Apple’s stock continues to flirt with the $1 trillion market capitalization level and we expect this barrier to be broken in 2018. Despite nearing in on this historic milestone, we continue to view Apple as one of the most underappreciated stocks in the world with a valuation that remains depressed.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Brian White has a yearly average return of 17.2% and a 69% success rate. White has a 21.8% average return when recommending AAPL, and is ranked #99 out of 4829 analysts.

This tech giant certainly has the Street divided. Based on 28 analysts polled by TipRanks in the last 3 months, 15 rate a Buy on Apple stock, while 13 issue a Hold. The 12-month average price target stands at $196.75, marking a slight upside from where the stock is currently trading.