Tiger Report 5

1. Apple Analysts Keep Warning of Slowing iPhone Sales

By Kristen Scholer 3/7/2016


2. Summary: Wall Street analysts are predicting that for the first time iPhone sales will decline. As such Pacific Crest Securities analyst has lowered his 12-month price target from $132 to $127. He maintains an overweight rating on the stock though. The analyst predicts Apple’s revenue to be $50 billion with iPhone sales of 47.5 million units. A FactSet survey of Apple analysts showed a prediction on 50 million units to be sold for the second fiscal quarter. iPhones are responsible for 68% of Apple’s revenue. The analyst expects strong performance from the upcoming iPhone (iPhone 7?) and believes that the new technology will “breathe new life into the company.”

3. Key takeaways:

- Some Wall Street analysts are predicting iPhone sales to decline for the first time ever

-68% of Apple’s revenue is from iPhone sales

-The iPhone 7 is expected to perform strongly in the second half of 2016

4. Action items: Apple equity

5. How it pertains to the Tiger Fund: Apple is the single largest holding in the Tiger Fund. Any negative performance by the company or its equity could harm the fund. If the analyst is correct in predicting that the new iPhone will “breathe new life into the company” then it might be worth maintaining our current position in Apple despite the possibility of a temporary devaluation due to lower sales in Q2 and Q3.

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