Just about the last thing tech needed on Wednesday after FANG stocks were bludgeoned to death by a confluence of factors (now testing the 100-DMA)…
…and after the Nasdaq posted its worst decline since February 8…
… was for Goldman to come out and say something negative about Apple.
But you know what they say, when it rains it fucking pours and so, we got this (out late last night):
“iPhone demand expectations for March and June are already weak but we believe that early CQ1 demand indications suggest even lower actual numbers than consensus is modeling,” the bank wrote, before explaining that they’re “slightly reducing our March unit expectation and make a larger reduction in our June quarter unit and ASP forecast.”
They continue, predicting that Apple will have “material channel inventory to clear in June to prepare for the launch of new products this Fall.” Goldman also cuts their replacement rate expectations citing “what has been weak replacement consumer behavior this cycle.” And then this:
Flowing from the changes to our iPhone shipments and ASP estimates, our revenue forecasts decrease by 2.4% and 2.7% to $256.6bn and $272.5bn for FY’18 and FY’19 respectively. Our revised revenue estimates for FY’18 and FY’19 are 2.2% and 0.4% below consensus. Our net income estimate for FY’18 is 2.2% below consensus and for FY’19 is 1.2% ahead.
So there you go. The shares aren’t moving on this (yet), but if tech were to sell off materially again today or if weakness in the sector were to prove to be something more than a short-term stumbling block, this kind of incrementally bad news is, well, incrementally bad.
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