Tuesday was a tipping point for Apple Inc. shares as they plummeted towards the fifth loss streak following the announcement of poor quarterly figures.
1 Nov 2016 – Marketwatch
The stock AAPL, -0.38% tacked on as much as 0.2% within minutes of the open, before the intraday selloff began. It closed down 1.8% at a seven-week low.
Apple reported after the Oct. 25 close fiscal fourth-quarter earnings that missed expectations. Since then, from a 10 1/2-month high close of $118.25, the stock has lost 5.7%.
UBS analyst Steven Milunovich wrote in a research note out Tuesday that results of a semiannual global smartphone survey showed that demand for Apple’s iPhone 7 model was strong in the U.S., with increasing interest in the higher-priced 7 Plus model. In China, however, he said there were signs of softness, including lower interest in the 7 model than for the iPhone 6 and iPhone 6s models.
Milunovich wrote in a note to clients Tuesday that given “slower upgrading and lower China interest,” the potential upside in iPhone 7 sales is limited.
Still, Milunovich reiterated his buy rating on the stock, citing an attractive valuation continued brand strength. His stock price target of $127 is 14% above current levels.
Despite the recent weakness, the stock was still up 5.9% year to date, while the SPDR Technology Select Sector exchange-traded fund XLK, -0.86% has climbed 9.8% and the Dow Jones Industrial Average DJIA, -0.58% has gained 3.5%.