Apple‘s euro partners‘ shares slump after JPMorgan cautions on iPhone X

(FinancialPress) — Apple Inc.’s (AAPL)  German shares were stunted in early trading after JPMorgan released an analyst note saying that the iPhone X is experiencing a worryingly weakening demand. This, they expect, will have a ripple effect that will reach the tech giant‘s European suppliers.

AMS AG – a critical supplier for the Cupertino-based company‘s operation in Europe – stock got downgraded by JPMorgan from neutral to overweight. The firm expects weakening demand to drag on into the second semester of 2018. The Austrian company‘s stock dipped a full 7.58% in early European trading, reaching a value of €78.04.

Other suppliers affected by the warning are STMicroelectronics NV (STM) which lost 3%, and Dialog Semiconductor plc (DLGNF), which in turn lost 3.61%.

Apple‘s own European stock lost 1.51% of its value in early Frankfurt trading.

Atlantic Equities analyst James Cordwell too lowered his rating for AAPL from neutral to overweight, but kept his price target at $190 and noted that the flagship iPhone X did experience healthy demand over the holidays – but feels that the trend may not persist going deeper into 2018.

“We believe a major component of the likely strength in the December quarter versus consensus is the fact that iPhone X supply improved much more quickly than we had anticipated,” Cordwell wrote. “”This better than anticipated supply means that a greater proportion of demand was able to be served in the December quarter, leaving March quarter expectations (which were predicated on significant pent-up demand) for ~20% iPhone unit growth now looking somewhat aggressive.”

Shawn Harrison, an analyst for Longbow, had his own chime on the issue. He said that the $999 anniversary-edition iPhone has seen “lukewarn“ reception in the market, and feels that the current sales cycle for the product has been “good, not great.“ He also trimmed his EPS forecast by $0.29 to reach $11.25, and expects 233 million units total to be shipped globally. He reduced the stock‘s rating from “neutral“ to “buy“.
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