A leading analyst firm has called Apple an “uninspired investment” as sales of the iPhone – particularly the X – continue to decrease, according to CNBC.
In a client briefing issued on Wednesday, Nomura Instinet told investors that Apple could experience a disappointing two weeks of iPhone shipments and profits.
Currently, Nomura categorises Apple stock as “neutral”, with a value of $175. The firm suggested that shares in the iPhone maker could tumble by 1.8 percent over the next year or so.
Jeffrey Kvaal, an analyst who works at the firm, said that investors have “succinctly dissected the key near-term driver of [Apple] shares” and that they expect “weak iPhone demand” to continue.
He also claims that shipments of non-Chinese smartphones are continuing to plunge. In the first quarter of 2018, sales of these handsets – predominately iPhones – fell by 9 percent.
“The lower shipments suggest that Apple’s Greater China revenues should be at the very least a significant drag on our overall estimate of 18 percent iPhone revenue growth in the second fiscal quarter,” said the analyst.
Apple’s earnings per share could decrease in value, as well. Kvaal believes that, in the second fiscal quarter of 2018, the firm’s ESP will be at $2.69 – compared to the $2.71 estimated put forward by other analysts.
By the third quarter of 2018, Apple’s ESP rate could fall to $2.12, which is despite other analysts giving expectations of at least $2.19 for the period.
This isn’t the first time in 2018 that analysts have decreased Apple stock as a result of disappointing sales projections. In January, Longbow Research shifted Apple shares from the “high” category to the “neutral” one.
At the time, Longbow said it expected Apple to ship 233 million smartphones in 2018, lowering a previous estimate of 238 million. Other analysts have put forward estimates of 239 million shipments.
Shawn Harrison, who works for the company, explained: “Apple found iPhone price elasticity with the introduction of the X blunting some demand.”
“Reception of the iPhone 8/8Plus was lukewarm with Apple shifting production back toward the iPhone 7 as a result.”
Then, in February, Goldman Sachs amended its Apple stock valuation to neutral. It made the change after coming across “weakening near-term data points on iPhone X demand”, which it said will “will likely weigh on shares ahead of the second fiscal quarter’s earnings report”.