Apple's revised guidance: What the analysts are saying

Price target cuts across the board, ratings mostly unchanged.

Excerpts from the notes we’ve seen:

Rod Hall, Goldman Sachs: Negative Pre-announcement as EM/China demand environment remains weak. Apple’s guidance cut confirms our negative view on demand in China that we have been flagging since late September. Neutral. Cut price target to $140 from $182. 

Pierre Ferragu, New Street Research: Apple Upgrade: Our thesis has played out in full and things are as bad as they can be. Rating revised to Neutral from Sell. Price target cut to $140 from $165. 

Michael Olson, Piper Jaffray: Dec Qtr Pre-Release Largely Due to China Weakness. China macro weakness was specifically highlighted as a primary reason for the miss, with that weakness being exacerbated by trade tensions with the U.S. and the stronger U.S. Dollar, among other factors. Overweight. Cut price target to $187 from $222.

Samik Chatterjee, J.P. Morgan: iPhone Volume Woes Continue on Cyclical Headwinds. Although preliminary F1Q19 results were quite disappointing, we see silver linings in: 1) better than expected ~27% y/y growth in Services revenue despite moratorium on app approvals in China; 2) strong growth and all-time high count of active devices in the installed base; 3) strong growth of ~50% y/y in wearables (Watch+ Airpods) demonstrating ability to leverage the large installed base to drive ancillary revenues; 4) strong non-iPhone revenue growth of +19% y/y. Overweight. Cut price target to $228 from $266. 

Daniel Ives, Wedbush: Apple’s Darkest Day in the iPhone Era. Staying bullish on the Apple story despite last night’s “black eye” results. It would be easy to throw in the white towel on the Apple story this morning and declare the iPhone growth story is dead in the water after a historic decade+ run that kicked off when Steve Jobs unveiled the iPhone in January 2007. To this point, while last night is a bitter pill to swallow and will pressure shares, we believe going forward this is an installed base story of 750 million active iPhones worldwide with 350 million of those in the current window of an upgrade opportunity over the next 12 to 18 months. Outperform. Cut price target to $200 from $275.

Gene Munster, Loup Ventures: Bridging the Gap Between Perception and Reality. AAPL stock is now at a crossroads. Some investors will consider the stock broken and never reward it with a “proper” multiple, but we’ve followed the company long enough to know there is cyclicality in the market’s relationship with Apple.

Walter Piecyk, BTIG: Cutting Apple Target As iPhones Miss By More Than 12 Million. We estimate iPhone units sales were less than 64 million in the December quarter, an 18% decline from last year. That’s the largest decline in unit sales since the March 2016 quarter following the launch of the iPhone 6S when unit sales declined 16%. We expect iPhone unit sales to drop to 42.5 million in the March quarter, reflecting typical seasonal declines and implying a 19% decline from the prior year. This is clearly an important metric and one that Apple said they would no longer report when they issued guidance 63 days ago. It is not helpful to investors to not report this metric. Cut price target to $197 from $235.

Aaron Rakers, Wells Fargo: A multi-quarter challenge. While weaker-than-expected iPhone results have been widely anticipated since November (we think street expectations were still in the low-70M unit range; we now estimate a mid-60M iPhone ship estimate), our industry checks leave us to believe that demand weakness, coupled with channel inventory burn-off, could persist for a few quarters. Market perform. Cut price target to $160 from $210.

Gene Munster, Loup Ventures (2): The Healing Process Begins. Tim Cook is at the top of his game. This may sound counterintuitive, given the negative Dec-18 results, but tough quarters will come and the team needs to rise to the occasion. Cook’s commentary on investor expectations, Apple’s talent, and its ability to innovate are spot on—a battle cry for the company and a sign of strong leadership. We don’t want to let them off the hook for bad forecasting, but there are more important things than quarterly forecasts, and Cook has his priorities straight.

Aaron Tilley, The Information: Apple Lowers Revenue Estimate for Important Holiday Season. Apple’s latest phones keep getting more and more expensive, a strategy that is colliding with the reality that consumers have to pay the full cost nowadays.

Guggenheim: Terminated Apple coverage with Robert Cihra’s departure.

More as they come in.