By Eddie Gunn
HSBC has downgraded Apple
(AAPL) stock from Buy to Hold while reducing its 12 month price
target from $205 to $200. That’s substantially lower than the consensus price
target of $232.42. The company’s shares were at $176.69 at the time of this
writing.
HSBC has cited the slowdown seen in the emerging markets
combined with Apple’s heavy reliance on a single product as the reasons for the
downgrade.
“Apple's iconic hardware unit growth is broadly over for
now. Revenues are only supported by higher selling prices and by the
development of services. Flat unit growth has hit Apple's share price and
incidentally its key suppliers. What has made the success of Apple, a
concentrated portfolio of highly desirable (and pricy) products is now facing the
reality of market saturation,” HSBC said.
HSBC noted that Apple’s move from “very high double-digit
revenue growth” to “pedestrian mid single-digit” growth for both revenues and
earnings “will weigh on the stock's investment case.”
Further reading: CNBC, MarketWatch.
