Why Apple (AAPL) Stock Is Down Today

Apple (AAPL) stock is declining after Citi cut its estimates for sales for current iPhone models.
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Apple (AAPL) - Get Report are falling 1.33% to $94.61 in late-morning trading on Tuesday after Citi cut its estimates for sales of currently available iPhone models.

Given macroeconomic uncertainty following Britain's decision to leave the EU and the longer iPhone replacement cycle, the firm now expects 40.3 million iPhones to be shipped during the third quarter at an average price of $626 million, Barron's reports. This is down from Citi's previous estimate for 41 million iPhones at $632 each.

The firm now expects per-share earnings of $1.35 on $41.19 billion in revenue for the third quarter, down from past expectations of earnings of $1.40 per share on revenue of $42.22 billion. Wall Street is looking for earnings of $1.40 on revenue of $42.2 billion.

But Citi urged investors to "look out to the iPhone 7 launch later in the year and realize expectations are tempered with December iPhone consensus units for 75mln (flattish y/y growth) with OLED phones in 2018 likely to spur further upgrades by the install base," according to Barron's. 

Additionally, Pacific Crest cut its estimates on a number of chipmaker stocks earlier today to reflect "a much more disappointing 2H16
iPhone 7 ramp than what we had previously expected."

(Apple is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings with a free trial.)

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.

Apple's strengths such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: AAPL

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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