Apple Stock Edges Up Despite Analyst's Lackluster December Quarter Forecasts, China Price Discounting: Retail Mood Remains Sour

Apple, Inc. ($AAPL) shares are edging up in Thursday’s premarket session as traders digested a muted December quarter outlook for the iPhone and price discounting in China.

UBS analyst David Vogt reduced his December quarter revenue estimates for Apple, citing another month of soft iPhone sell-through, TheFly reported. The analyst said October and November typically account for 66% of iPhone sales December quarter. 

With Counterpoint data showing an 8% year-over-year (YoY) decline in November iPhone sales, the analyst lowered his December unit and revenue estimates from 77 million and $69.7 million, respectively, to 74 million and $67.2 million, respectively.

Vogt’s updated December revenue estimate represented a 4% YoY decline compared to his previous estimate for a flattish performance. He noted that the consensus currently modeled 2% growth.

On the other hand, UBS raised its Service segment revenue estimate by 1%, citing better App Store traction. 

Overall, the firm reduced its December quarter revenue estimate from $123.3 billion to $120.8 billion, with the updated estimate trailing the consensus of $124.9 billion. It also reduced its earnings per share (EPS) estimate for the quarter from $2.31 to $2.25, below the consensus of $2.36.

As such, UBS maintained a ‘Neutral’ rating and a $236 price target for the stock. 

Separately, Apple plans to run a four-day promotion between Jan. 4 and 7, offering discounts of up to 500 yuan ($68.50) for several iPhone models purchased using eligible payment methods. Reuters earlier reported this.

The development comes amid aggressive price cutting by local Chinese players, including Huawei.

On Stocktwits, sentiment toward Apple stock stayed ‘bearish’ (42/100), with the dull mood accompanied by a ‘low’ message volume.

An Apple watcher on the platform said he expects the stock to drop hard in the coming weeks.

Another fretted over the high valuation.

Apple shares ended 2024 with a gain of 31%. In premarket trading, the stock was up 0.09% at $250.65 as of 8:17 a.m. ET.

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