RBC Capital Lowers Estimates, PT on Apple (AAPL)

RBC Capital analyst Amit Daryanani is the latest to lower estimates on Apple (NASDAQ: AAPL) amid supply chain weakness. The analyst also lowered his price target to $140.00 (from $150.00) while maintaining an Outperform rating.

"We are adjusting Mar-qtr expectations lower to reflect a host of supply chain data points that suggest unit headwinds are likely in March. Our updated estimates call for March-qtr iPhone units of 54M (Street 60M+) but the estimate is modestly ahead of current supply chain data points that peg AAPL March-qtr builds around 50M. We think, inline with historical trends, AAPL may end up over-shipping vs. the supply chain in March-qtr as they drive channel fill. For FY16 our model calls for $234.9B/$9.65 vs. Street at $243.9/$9.81, as we assume iPhone units will come in around 227M (-2% y/y) though we expect y/y growth to resume in June-qtr and beyond. Fundamentally, once investors get past Mar-qtr concerns we believe AAPL should work higher driven by – ASP tailwinds (more memory, larger screen, iPad Pro), Optionality of 4” iPhone refresh, gross-margin expansion and sustained FCF generation and buybacks. Maintain OP but adjusting our target to $140 (prior $150)."

The firm estimates December quarter revenues/EPS of $76.7B/$3.18 (Street $77.2B/$3.26) and ther March quarter revenues/EPS stands at $55.7B/$2.37 (Prior: $61.0/$2.59, Street $60.3B/$2.45)

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $111.34 yesterday.

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