As has been widely reported, the investment bank trimmed its price target on the tech juggernaut in part to account for what analysts perceive to be lower growth projections for the smartphone industry at large. CNBC noted that Goldman has scaled back its estimates for global smartphone unit growth to 5 percent this year, down from a previous 6 percent, and more significantly, to 4 percent in 2017, where once that estimate had been 7 percent.
As a result, Goldman took its price target for Apple down to $124 from $136 and yet kept its buy rating on the name. The firm’s new estimate for Apple iPhone unit sales for this year now stands at 211 million, down slightly from 212 million, and lower selling prices may exacerbate that impact as Apple targets emerging markets.
In the research note, Goldman stated, as noted by CNBC: "We also fine-tune our iPhone forecasts by introducing a detailed regional build, updating our installed base model and adding an inventory overlay. Even with these assumptions, which we view as conservative, our model implies upside to consensus estimates.”
Looking ahead, 2017 should be marked by a resurgence in demand for iPhone 7 upgrades. The analysts went on to say: “We continue to view consensus estimates for [full year 2017] as too low, as we expect an increase in upgrades with the iPhone 7, based on the pent-up demand evident in our recent U.S. consumer survey, combined with our estimate of 26 percent year-on-year growth in the iPhone installed base as of Sept. 2016."