Apple Inc (NASDAQ: AAPL) stock is trading lower Monday after Loop Capital downgraded the stock to Hold.
Analyst Ananda Baruah set a price target of $180 on Apple.
The re-rating reflects Apple is reducing its builds and shipment forecasts for the second time in the last four weeks.
Specifically, Loop's Supply Chain Analyst John Donovan sees Apple having reduced its June quarter builds and shipments by ~10%, which, per Baruah, is incremental to the lowered June quarter guidance the iPhone maker provided on May 4.
The analyst sees material downside risk to June quarter revenue (both iPhone & overall) relative to both Apple's guidance and Street after this weekend.
Apple has incrementally reduced its June quarter iPhone builds and shipments.
On May 4, Apple guided June quarter revenue to $80 billion, or down by ~$5 billion than that Street. The guide reflected ~40 million iPhone shipments, 2 million - 4 million lower than its prior estimate and 8 million lower than Street.
This weekend Apple reduced its June quarter iPhone shipment estimate by an incremental 5 million - 35 million (and its builds by a similar amount), which the analyst believes is demand related.
While the analyst believes Apple's September quarter & December quarter shipment outlook remains intact, and the risk of a guidance cut has increased.
The analyst also sees positive implications developing as they move into the Fall. He believes Apple is targeting the September quarter & December quarter shipments to be 65% new phones (iPhone 15) vs. 50 - 55% for the iPhone 12 - iPhone 14.
Over the weekend, Apple reduced the benefit of the mix, as last week he expected 75% of September quarter & December quarter shipments to be new phones (iPhone 15).
Despite the overall risks, the analyst believes stronger than appreciated iPhone ASPs can counterbalance softening units.
Price Action: AAPL shares closed lower by 0.55% at $174.20 on Monday.