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Apple Target Price Cut by Raymond James on Slower iPhone and Wearables Demand

Apple's share-price target was cut 15% at Raymond James to $305 from $360, as an analyst raised concern that demand for the tech giant's iPhones and wearables is easing.
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An analyst at Raymond James on Monday cut his price target on Apple  (AAPL) - Get Apple Inc. Report shares to $305 from $360 over concern about slower demand for the tech giant's iPhones and wearable products in light of the coronavirus economic shutdown.

The Cupertino, Calif., company's shares at last check were up 0.3% to $268.83.

In a note to clients Analyst Chris Caso affirmed his outperform rating on Apple and lowered his price target to reflect near-term headwinds.

"Apple already removed guidance for the March quarter, mainly due to China production and demand issue," Caso wrote. 

"We naturally expect weaker demand throughout the globe as all retail stores are closed. Our checks suggest iPhone component order cuts on the order of 15% of prior expectations."

Caso added that Apple's wearable products, such as the Apple Watch, will be hurt as well, "though we believe Mac and iPad have been more resilient (we have taken our Mac assumptions higher in line with evidence of stronger global PC demand)."

"We see no reason to change our services estimates at this point, and that could potentially be an area of strength as quarantines could help with subscription volumes," Caso said.

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Caso said he expected Apple will have a fall iPhone launch, only at a lower volume due to the coronavirus outbreak. 

The analyst said that "since the phone design is essentially complete, and will be followed by what we believe to be a more substantial form-factor change in 2021, it would make no sense for Apple to cancel or substantially delay the launch unless they had no choice."

Bloomberg reported Monday that Apple is gearing up to redesign its top-level iPhones. The company has scheduled its March quarter earnings report for April 30.

Caso also lowered his price targets on several suppliers, including Qorvo  (QRVO) - Get Qorvo, Inc. Report to $120 from $135; Qualcomm  (QCOM) - Get Qualcomm Inc Report to $110 from $115, Skyworks  (SWKS) - Get Skyworks Solutions, Inc. Report to $120 from $140, and SiTime SITM to $25 from $30.

Separately, Bernstein analyst A.M. Sacconaghi Jr.  lowered his firm's price target on Apple to $285 from $300. 

Sacconaghi, who maintained  a market-perform rating on the shares, said that Apple shares were not particularly inexpensive, but the stock's decent performance to date is not necessarily unwarranted and could continue into earnings season. 

Apple shares were up nearly 20% from March 23 through Thursday's close. They were down 8.7% in 2020 through Thursday.