Apple investor fears about China & iPhone 6s are 'overblown,' FBR says

As shares of Apple continue to hover just above $100, investment firm FBR stood by the iPhone maker on Monday, saying that the overly negative sentiment on Wall Street is not justified.

Analyst Daniel H. Ives acknowledged that while Apple stock is in a "turbulent" period, he believes investors should buy in while shares are affordably priced. To him, fears over growth slowing at Apple are "overblown."

"We believe Bearish sentiment has swung too far now, as (Apple CEO Tim) Cook has a relatively low iPhone unit bar for the dreaded March and June quarters," Ives wrote.

Admitting that Apple stock has seen a "miserable, dark period over the last few months," Ives believes investors are underestimating the company's potential heading into 2016. In particular, he anticipates an "iPhone 7" upgrade in September to reignite growth, attracting many users who have not yet upgraded to a larger iPhone screen size.

In the interim, he believes the iPhone 6s has seen "less than stellar" demand, but is still in a position to exceed expectations in the coming quarters.

"With our initial read on the December quarter/holiday season coming in relatively strong, we believe Apple should be able to hit the Street's iPhone forecasts for (the first quarter of calendar 2016) and that March/June estimates are now achievable with supply chain data points."

Shares of Apple fell Monday, the first day of trading in 2016, amid significant drops across the U.S. markets. The losses were attributed to reports out of China suggesting its economy is slowing down.

China has proven to be an especially pivotal part of Apple's continuing growth strategy, as the country will soon become the iPhone maker's largest.

Ives believes that China will remain the "main fuel tank" for Apple as it pushes into 2016. He sees the company selling more than 220 million iPhone units this year, which he called a "commendable achievement for an 'S' product cycle."

Though FBR is standing by Apple, the firm did cut its estimates last month amid fears of the iPhone 6s not driving growth. The firm has nevertheless maintained an "outperform" rating for shares of AAPL, with a price target of $150.

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30 Comments

SpamSandwich 32917 comments · 19 Years

About 8 years ago

LOL. Analysts...

lkrupp 10521 comments · 19 Years

Translation: Investors swallowed the Apple is Doomed™ mantra hook, line, and sinker. Tell a lie often enough and people will start to believe it. Human nature at its best.

scotty d 7 comments · 12 Years

Ive was the analyst who talked down the stock last week and lowered his price target. Now that the stock has tanked, he's saying, "Hey guys, it's not that bad!"
Yeesh!! Analysts !@#!!%&**!!

Dr. Scott

vvswarup 336 comments · 14 Years

sog35 said:

Friken pathetic that it takes an analyst to call out those supply check bullshit instead of the Apple CEO who is getting paid $100,000,000 a year.

Tim Cook is great at operations but he's a total loser at controlling the company message.
He allows worthless media and analysist to crap on the company name and he does NOTHING.
Stock has lost over $30 the last few months. The stock is down almost $200,000,000,000 and yet Cook says nothing.

Tim Cook has already told analysts that they can't conclude anything on the basis of supply chain checks. If analysts continue to do so, blame the buy-side analysts who are the reason those analysts still have a job.

rogifan_old 725 comments · 9 Years

So basically he's saying the bar has been set so low now it should be easy for Apple to cross it. Lol

I did notice that AAPL is down less than a quarter of a percent today while most other stocks are down 2-5% or more. I don't know if that just means AAPL was way over sold and now these other stocks that have had huge run ups are taking the hit. Though AAPL was down 2% when the market first opened and has climbed it's way up all day.