Analysts at Baird said they have downgraded shares of Apple Inc. (NASDAQ:AAPL) to Neutral and lowered their price target to $465 per share. They believe Wall Street’s consensus for the company’s March and June earnings reports are just too high.
Apple Inc. (NASDAQ:AAPL) shares have been downgraded by analysts from Baird. This comes on the same day analysts at Deutsche Bank said they have reiterated their Buy rating because they don’t feel customer loyalty is reflected in the stock’s current price.
On Monday Baird analysts issued a report to investors saying they downgraded shares of Apple Inc. (NASDAQ:AAPL) to Neutral and lowered their price target on the stock to $465 per share from $570 per share. The analysts are “increasingly wary of several near-term risks,” especially consensus estimates they simply believe are too high.
After Apple Inc. (NASDAQ:AAPL) released its earnings report last week, Baird analysts said they “implemented a hard reboot” of their estimates for “a more conservative baseline.” They note that Wall Street estimates fell less than theirs did, so they believe Apple Inc. (NASDAQ:AAPL) is being set up to miss its June consensus when it reports results from its March quarter. Baird said although Apple’s March consensus estimates appear to be attainable even though they are just above the high end of guidance, there is some risk if the company doesn’t add new carriers or release new products.
The analysts said they expect concerns over the company’s gross margins to continue, especially with the iPad Mini impacting margins more than they had expected. They also called demand outside of the U.S. and China “relatively disappointing.” They named other concerns about Apple Inc. (NASDAQ:AAPL) as well, like iPhone average selling price risk, slowing innovation, increasing competition, and new product or market uncertainty.
In spite of the downgrade, Baird analysts said they do remain positive on Apple’s “unmatched ecosystem, product portfolio, the likelihood for future innovation and its balance sheet and cash generation.”