Goldman Sachs is predicting that tech giant Apple will sell fewer than the 67 million units Wall Street expects it to, according to a report by CNBC.
Goldman Sachs Analyst Rod Hall rated the company as neutral, and advised his clients that Apple will probably not meet unit sales and average selling price estimates later in the year.
“We believe consensus is assuming a steep recovery in China, with little change in demand trajectory for other (geographies). We note that iPhone shipments in the U.S. and Japan cycled up in CY18, with U.S. shipments growing 8 percent year over year in CY18,” Hall told his clients in a note.
“A better consumer environment for the most part of 2018 combined with compelling products later in the year helped drive iPhone growth in these regions. For CY19, however, we note that U.S. consumer sentiment is down year over year and an end to subsidies in Japan could create volatility.”
In premarket trading on Wednesday (April 24), Apple shares inched up slightly higher. The equity is also up, at more than 27 percent over the last year, to $207.48 a share through Tuesday (April 23).
Goldman Sachs raised its price target on Apple to $182, which is still a 12 percent decline.
In an attempt to combat a slowing replacement cycle for its phones, Apple has been adding features like facial recognition and wireless charging, as well as bigger screens and more storage space.
The tactic hasn’t always been successful. In France, iPhone shipments have decreased 12 percent, the U.K. saw an 11 percent decrease and Spain saw a 3 percent decrease. China saw a 23 percent drop in in shipments year over year.
“It is too early to assume a recovery on units in China to pre-2018 levels given increasing local brand traction and ongoing consumer weakness that may suggest a 'new normal' level of demand for the country,” Hall wrote.