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What you need to know

  • Goldman Sachs analyst predicts near-term revenue losses for Apple.
  • Rod Hall cites store closures and COVID-19 as the cause.
  • The analyst does believe that the company will begin to recuperate by the end of 2020.

Apple's stock, along with the rest of the stock market, has seen huge fluctuations over the last week due to market uncertainty surrounding the economic impact of COVID-19. Today, Goldman Sachs analyst Rod Hall released a new note to investors that cut near-term earnings estimates for Apple.

Reported by Barron's, Hall cut Apple's price target from $300 to $265 and lowered revenue forecasts over the coming months

"Following Apple's pre-announcement we lowered our demand expectations for domestic China ... However, we believe that the current situation warrants increased caution regarding global demand outside of China."

Hall notes Apple's decision to close all of its retail locations as part of the reason for their new estimation. Last week, Apple had announced that all of its stores outside of greater China would close until March 27th. However, the company updated that announcement on Tuesday, now saying that its stores would remain closed until further notice.

"Given all of this, we are moving to a central thesis that assumes incremental demand weakness in large global markets up through mid-May with impacts attenuating after that ... If demand impacts are ultimately as severe as those we have seen in China then our model may prove optimistic."

Despite the anticipated struggles to come over the next couple of quarters, Hall remains optimistic that the company will begin to see recovery by the end of the year, and raised his December quarter estimates as a result.

Apple's stock plummeted 12.5% to $243.34 on Monday, but after the White House announced a stimulus package was incoming, its price regained on Tuesday, ending at $252.86.