Tim CookSource: Apple

What you need to know

  • J.P Morgan has cut its Apple target share price.
  • It has lowered its valuation from $350 to $335.
  • That's because of "a much harsher look" at Apple's sales volumes.

J.P Morgan analyst Samik Chatterjee has cut his AAPL target price from $350 to $335, citing a "much harsher look" at Apple's sales prospects over the coming months.

As reported by MarketWatch:

J.P. Morgan analyst Samik Chatterjee lowered his price target on Apple Inc. shares to $335 from $350 Wednesday, writing that he has taken a "much harsher look" at sales volumes for the June quarter and even the September quarter due to "limited" customer engagement during the COVID-19 outbreak.

In an investors note Chatterjee stated:

"We are now drastically cutting our C2Q sales estimate, which assumes stores reopen outside of China in mid-May at the earliest as well as a steady ramp in activity to normal sales levels by the end of C3Q."

Chatterjee believes that higher online sales will not be enough to compensate for the closure of all of Apple's Stores worldwide outside Greater China.

He has also factored in a "modest delay" of one or two months on Apple's new 5G iPhones. What is interesting to note, however, is that Chatterjee's current estimation is based on stores outside of China opening in Mid May, in just five or six weeks' time. It seems unclear from the current state of the pandemic whether this will be possible. More delays to stores reopening could further negatively impact sales.

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Apple's share price has leveled out somewhat, after tumbling through the second half of February and much of March. The share price sunk as low as $229.24 on March 23 before recovering some lost gains in the last couple of weeks. Currently, the share price sits at $259.53 and is due to open up 1.30%.