Skip to main content

Analysts at Citigroup lowered their estimates for Appleundefined today, citing worries that June's Brexit vote might hurt the technology superstar and historical millionaire-making investment.

From a previous estimate and Wall Street consensus of $42.2 billion, Citigroup now expects $41.2 billion in revenue from the Cupertino, Calif.-based giant. The analysts also lowered their forecast for earnings per share, from $140 to $135. Apple finished down slightly to just over $95 a share in Tuesday trading. 

The analysts are expecting lower demand for Apple's products caused by "Brexit related" "macro uncertainty." In addition, Citigroup is bracing for weak sales for the company's iPhone 7, slated for release this fall. Yet this is not the time to dump Apple. Even the analysts concur that the Apple's cloud initiative will benefit Apple and that its loyal fans will continue to buy the laptops, phones and other products for which it is known. 

Image placeholder title

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

U.K. consumers' purchasing power has suffered in the last two weeks as the pound plummeted in value. About 2.3% of Apple's revenues come from Great Britain. With the pound at a 31-year low against the dollar, $700-plus iPhones don't seem like an attractive purchase.

Still, Citi analysts are expecting profits from the company. The analysts are keeping their "Buy" rating, as well as a price target of $115 per share. (That would represent a good profit for investors who get in on dips like today's.)

TheStreet Recommends

"We believe [Apple] is only starting to make progress in software and services that help create and monetize a consumer and corporate installed base," Citi wrote.

The cloud is where technology companies are going to make serious money in the next few years. The cloud-based software industry is expected to shoot higher than $112.8 billion by 2019, according to analysts at IDC. Compare that to the $48.8 billion the industry made just two years ago.

Technology and internet companies as disparate as Amazon, Adobe, and Salesforce have opened up significant business arms in this space or -- in the case of Adobe -- even shifted their focus to the cloud.

When Apple taps into the profits from software-as-a-service technology, it's going to more than compensate for any lousy iPhone sales.

In addition, the Citigroup analysts say that a good chunk of Apple's strength lies in its rabid fan base: "We believe the Apple ecosystem keeps customers in the Apple ecosystem, which does not end but rather begins with one product and generally results in additional future products."

There will always be an overnight line outside Apple Store doors. Now is not the time to abandon Apple. Instead, it's a great time to load up on shares.

---

85% Accurate Trader gives his Personal Guarantee: "Give Me 9 Minutes a Week and I Guarantee You $67,548 a Year." He turned $50,000 into $5 million trading this way and for a limited time, he's guaranteeing you at least $67,548 per year in profitable trades if you follow this simple step-by-step process.Click here to see how easy it is to collect thousands of dollars in "Free Money" every month.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.