Apple shares to drop amid 'unrealistic' iPhone X predictions, says Deutsche Bank

Investor expectations for Apple's sales of the latest iterations of the iPhone are 'more optimistic than realistic' according to an analyst at Deutsche ...

Callum Rivett
|Oct 1|magazine4 min read

Investor expectations for Apple's sales of the latest iterations of the iPhone are 'more optimistic than realistic' according to an analyst at Deutsche Bank.

The report provoked a 0.7% fall in share prices in early trading, whilst Apple has lost $50bn in market value in September despite still being one of the best-performing large-cap stocks.

"Expectations are pricing in more than Apple can chew," said analyst Sherri Scribner on September 27.

"Deutsche Bank feels that Apple's stock has risen too far, with substantial additional upside needed to drive further share gains from here."

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"Our view is that FY-19 estimates need to fall to realistically reflect a year after a strong cycle."

Scribner predicts Apple's fiscal sales for 2019 will drop and reaffirmed her price target of $140 for shares - 9% lower than earlier in the week.

"To beat expectations by a magnitude of $30bn, this cycle would require Apple to ship 45 million more iPhone units in FY-18 than currently expected," continued Scribner in the note to investors.

"This means Apple needs to ship 290 million iPhones in total. We view this as being highly unlikely."

"It is more likely that unit forecasts decline, much like the cycle for the iPhone 6s, and estimates for FY-19 need to come down to better reflect realistic expectations."