Crispr Therapeutics shares tumble after significant earnings miss
On Friday, KeyBanc Capital Markets maintained its Underweight rating on Apple Inc. (NASDAQ:AAPL) with a steady price target of $200.00, well below the current trading price of $241.53. The firm's analyst, Brandon Nispel, pointed to recent data indicating a significant month-over-month decline in hardware spending, which fell short of the three-year average for January. According to InvestingPro data, 22 analysts have recently revised their earnings expectations downward for the upcoming period, suggesting growing concerns about near-term performance.
According to Nispel, the Key First Look Data (KFLD) revealed a 40% drop in indexed spending month-over-month, which is below the average decrease of 36% for the past three years. Additionally, the year-over-year growth also decelerated, increasing only 6% compared to 7% in December. This trend is seen as a negative signal, especially since it represents a seasonally weaker period and a slowdown in growth compared to previous years. This aligns with Apple's modest revenue growth of 2.61% over the last twelve months, as reported by InvestingPro, which maintains comprehensive financial health metrics and analysis for over 1,400 US stocks.
Nispel expressed concern over the aggressive consensus estimates for Apple's fiscal second quarter, which followed the first-quarter results. These estimates suggest that Hardware revenue will be around 0% +/- 2%. This forecast is particularly surprising to Nispel, given the trends in iPad and Mac sales, as well as guidance for lower-than-average gross margins, which could imply a more significant decline in iPhone revenue than the company's average.
The analyst's cautious stance on Apple is reinforced by two main factors: the company's current valuation and growth expectations for 2026, which Nispel believes may be overly optimistic. Despite the general consensus, KeyBanc's analysis leads them to remain below the market's expectations.
In summary, KeyBanc's analysis suggests that while market expectations for iPhone growth in 2025 have been adjusted to a modest 1% increase from a previous 7%, these projections are now deemed reasonable. Yet, the firm maintains its Underweight rating for Apple stock, citing valuation concerns and potentially inflated long-term growth expectations.
In other recent news, Apple Inc's foreign-branded smartphone shipments in China saw a minor increase of 0.6% in December, with the number of units rising to 3.74 million from 3.72 million the previous year, according to data from the China Academy of Information and Communications Technology (CAICT). The overall phone sales in the country experienced a notable rise of 22.1%, reaching 34.53 million units in December. Meanwhile, UK-based company Arm, a key intellectual property provider for Apple, has begun recruiting from its customer base and is considering selling its own chips, marking a significant shift in its business model.
On another note, Apple's CEO, Tim Cook, has teased a new product launch scheduled for February 19th, although the specific product remains undisclosed. Speculations suggest it could be the iPhone SE 4 or the iPhone 16E. Furthermore, Apple continues to boost its AI features for Chinese iPhones through partnerships with Baidu (NASDAQ:BIDU) and Alibaba (NYSE:BABA), aiming to compete with local smartphone brands. The collaborations are focused on developing AI-powered search features and improvements to the Chinese version of Siri voice assistant, as part of the Apple Intelligence suite. These are the latest developments from the company.
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