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Apple Faces Challenges in a No-Growth Era


Apple Inc. is currently experiencing a period of no-growth, leaving investors questioning the future of the company’s stock. Following Apple’s latest report, which revealed a third consecutive quarter of revenue declines, one analyst has taken a more cautious stance on the tech giant.

Barton Crockett, an analyst at Rosenblatt Securities, stated that Apple’s most recent report underscores the company’s current slowdown phase. Crockett downgraded his rating on Apple shares from buy to neutral, while maintaining a price target of $198. He acknowledged that the iPhone remains a crucial device in today’s economy but expressed uncertainty about its impact on the stock.

Crockett explained that a slowdown in the United States is expected to persist until a significant new product category emerges. However, both the timing and success of such a development remain uncertain. Therefore, he sees little reason to favor shares that are currently trading near peak absolute and relative multiples.

David Vogt, an analyst at UBS, echoed Crockett’s cautious sentiment as he analyzed Apple’s forward-looking commentary. Although the company does not provide traditional guidance, management did offer some insights. They anticipate similar revenue performance for the September quarter compared to the previous quarter. Additionally, they expect an acceleration in iPhone and services revenue relative to the June quarter, as well as double-digit year-over-year declines in iPads and Macs.

Vogt dismissed claims that weakness in iPads and Macs is only temporary and attributed any potential improvements in iPhone sales to foreign-exchange trends rather than shifts in demand. He expressed disappointment in the lack of acceleration and set a neutral rating and price target of $190 on Apple shares.

In this challenging era of no-growth for Apple, investors are urged to approach the company’s stock with caution. The future trajectory of Apple’s revenue and product development remains uncertain, making it difficult to confidently predict the company’s success.

JPMorgan’s Positive Outlook for Apple’s Earnings Growth

Samik Chatterjee, an analyst at JPMorgan, offered an optimistic view on Apple’s future earnings growth. Despite facing currency headwinds that affected the top-line guidance, Chatterjee believes this will have limited implications for the September quarter. He remains confident in Apple’s long-term story.

Chatterjee sees potential for improvements in consumer spending, which will lead to healthy revenue and robust earnings growth. He expects this to drive an outperformance in Apple’s shares, as investors recognize the high predictability of outcomes. With an overweight rating and a $235 target, Chatterjee maintains a positive outlook on Apple.

Oppenheimer’s Perspective: Patience is Key

According to Martin Yang, an analyst at Oppenheimer, it is crucial to exercise patience when considering Apple’s present stagnating revenue growth. Yang believes there is no cause for concern in the long run, as he envisions significant opportunities for the company.

While acknowledging the lack of growth in fiscal 2023, Yang emphasizes Apple’s stronger competitive position in hardware and its durable high-margin revenue growth from services. He attributes the current slower revenue growth to unfavorable macro factors, but remains positive about Apple’s ability to expand its total addressable market.

Yang rates the stock as outperform and raises his price target to $220 from $195, underscoring his conviction in Apple’s superior long-term profit growth from both hardware and services market-share gain.

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