Apple falls into bear market territory after Goldman slashes its price target again

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Edgar Su/Reuters
  • Goldman Sachs cut its price target on Apple for the third time this month, citing signs of weak iPhone demand in China and other emerging markets.
  • Earlier this month, the smartphone giant reported underwhelming iPhone sales and said its holiday quarter would be on the low end of expectations.
  • Apple has cut production orders for all three iPhone models launched in September, according to the Wall Street Journal.
  • Apple’s share price has declined over 20% and has lost more than $220 billion in market value from its October peak.

Apple plunged as much as 5.6% on Tuesday, sending shares into a bear market, after Goldman Sachs cut its price target for the third time this month.

The stock topped out at $233.47 on October 3 and touched an intraday low of $175.51 on Tuesday, down more than 20% from its October peak.

In the bearish note on Tuesday, Goldman Sachs analyst Rod Hall said that it seems like Apple “miscalculated on the price/feature balance for the [iPhone] XR.”

Hall added: “In addition to weakness in demand for Apple’s products in China and other emerging markets it also looks like the balance of price and features in the iPhone XR may not have been well-received by users outside of the US.”

It’s the third time Goldman Sachs has slashed its price target in November alone. It now has a price target of $182, near where shares are trading on Tuesday.

Earlier this month, the smartphone giant reported underwhelming iPhone sales and said its holiday quarter would be on the low end of expectations. It also decided to stop posting unit sales for iPhones, iPads, and Macs.

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Last week, a handful of iPhone suppliers – including Apple’s main Face ID technology provider Lumentum and iPhone radio-frequency chip supplier Qorvo – cut their respective outlooks. Both cited a drop in demand from one of their biggest customers, although Apple wasn’t specifically named.

With investors speculating that all these signs point to weakness in new iPhone sales, the Wall Street Journal reported on Monday that Apple in October cut its production plan for its cheaper iPhone XR model. The company also told several suppliers last week that it cut its iPhone XR production schedule again.

It’s been a big fall for the tech giant, which in August became the first US company with a $1 trillion market cap. But Apple has lost over $220 billion in market value from its October peak.

Apple is now up just 5% this year.

Source: Business Insider

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