Date
22 September 2019
Analysts said iPhone demand in China was getting better as Apple cut prices, upgraded its device financing program and benefited from improved trade dialogue between the United States and China. Photo: AFP
Analysts said iPhone demand in China was getting better as Apple cut prices, upgraded its device financing program and benefited from improved trade dialogue between the United States and China. Photo: AFP

Apple’s upbeat forecast allays fears over declining iPhone sales

Apple Inc. shares rose nearly 5 percent, pushing the iPhone maker’s market valuation back toward US$1 trillion as its quarterly report and upbeat forecast soothed investors worried about falling iPhone sales, Reuters reports.

Apple has been jockeying with Microsoft Corp. and Amazon.com for the title of most valuable US company as all three have passed the symbolic trillion mark.

The Cupertino, California, company first breached a trillion-dollar valuation in August last year. But it fell back as signs emerged of weak demand for its newest iPhones, especially in China, the world’s biggest smartphone market.

Apple’s shares ended 4.91 percent higher on Wednesday, valuing it at around US$969 billion, based on shares outstanding as of April 22.

That left its stock market value ahead of Amazon and just behind Microsoft, with a market capitalization of US$980 billion.

Though iPhone sales dropped 17 percent in the fiscal second quarter, the company’s services revenue beat Wall Street expectations and it forecast an upbeat third quarter.

Apple spent a record US$24 billion on buybacks during the quarter. Its buybacks last year topped US$70 billion, or around five times its own spending on research and development.

At least eight brokerages hiked their price targets on the stock following Apple’s report, with Jefferies making the most aggressive move by raising its target by US$50 to US$210.

“Apple reported a clean March quarter and bullish June quarter outlook which against a backdrop of negative investor sentiment sets up for shares to move higher,” Morgan Stanley analysts said.

Analysts said iPhone demand in China was getting better as Apple cut prices, upgraded its device financing program and benefited from improved trade dialogue between the United States and China.

Twenty-one analysts recommend buying Apple’s stock, while 18 analysts are neutral and two recommend selling, according to Refinitiv data on Wednesday.

Apple’s overall favorability among analysts puts it in line with American International Group and Berkshire Hathaway.

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CG