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Why One Apple Bear Is Now More Cautious on the Stock Than Ever

Lynx Equity Strategies analyst KC Rajkumar cut his price target on Apple stock to $110 from $125.

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One of Wall Street’s biggest bears on
shares has grown even more bearish.

Lynx Equity Strategies analyst KC Rajkumar, who has long been skeptical about the growth outlook for
(ticker: AAPL), on Thursday chopped his price target to $110 from $125. His new target is by far the lowest target price on Wall Street, with the average analyst target around $170.

The move comes just hours ahead of Apple reporting financial results for the December quarter, due after the close of trading on Thursday.

Rajkumar’s view is that there’s been a divergence between Apple’s fundamentals and investor expectations. Over the last few months, he asserts, iPhone 14 demand has been clouded by long lead times for high-end models due to Covid-related supply issues at Foxconn’s manufacturing facility in Zhengzhou.

But he added that as that issue has fade, “underlying demand issues have become more obvious.”

The analyst said his incrementally more negative view in part reflects order cutbacks at Foxconn, the Apple supplier. “Coming into January, we believe device build orders for iPhones and Mac softened at Foxconn,” he wrote. “We believe excess inventory after the holiday season and lowered demand outlook could be triggering order cutbacks for Mar and June quarters.”

He also sees “significant” end demand iPhone demand weakness in the U.S., Europe and Asia. “Our research shows lower than expected sell-thru in Europe,” he wrote. “We believe European telcos may have had to return excess iPhones due to poor holiday sales.”

He also sees “little help” from the Mac, as a slowing global economy “pushes consumers to low-cost PCs.” And he thinks that the company in a slower growth environment could lose smartphone market share to Samsung and other Android-based devices.

“Holiday sales of Mac/iPads in the U.S. may also not have been great as implied by Apple having to resort to discounted sales out of electronics retail stores,” said Rajkumar. “Easy availability of all iPhone models in U.S. telco stores as supply normalized point to less than stellar sell-through.”

The analyst projects Apple’s revenue for the fiscal year ending in September of $369 billion, down 6.5%, while consensus estimates call for $404 billion, up 2.5%. For fiscal 2024, he expects another 2.7% dip, to $358 billion, while Wall Street is projecting a 1.5% increase to $410 billion. Rajkumar sees profits of $5.60 a share in fiscal 2023, and $5.40 in fiscal 2024; consensus calls for $6.20 this year and $6.50 next.

Amid a roaring tech rally, Apple shares were rising 3.1% to $149.92.

Write to Eric J. Savitz at


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