Apple's stock downgraded as analyst warns that revenue could disappoint

Organon & Co

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Health Care : Pharmaceuticals | Small Cap Value

Company profile

Organon & Co. (Organon) is a global healthcare company. The Company is engaged in developing and delivering health solutions through a portfolio of prescription therapies and medical devices within women's health, biosimilars and established brands (Organon Products). Organon has a portfolio of contraception and fertility brands, such as Nexplanon or Implanon NXT, NuvaRing, Follistim AQ, and Elonva. The Company’s Biosimilars portfolio spans immunology and oncology treatments. It also has a portfolio of established brands, including brands in cardiovascular, respiratory, dermatology and non-opioid pain management. The Company sells these products through various channels, including drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. It operates its manufacturing facilities in Belgium, Brazil, Indonesia, Mexico, the Netherlands and the United Kingdom.

Apple's stock downgraded as analyst warns that revenue could disappoint

9:36 am ET May 22, 2023 (MarketWatch) Print

By Emily Bary

Loop Capital is worried about June-quarter revenue expectations and warns about 'material downside risk'

Apple Inc.'s iPhone business normally heats up in the fall when the company announces its new smartphone models, but one analyst sees a rocky road between now and then.

Loop Capital Markets analyst Ananda Baruah downgraded Apple's stock (AAPL) to hold from buy Monday, warning that the company's current quarter could prove disappointing.

Baruah said that Apple cut its June-quarter estimates for iPhone builds and shipments by about 10% over the weekend, something he thinks brings "material downside risk" to revenue estimates for the period.

Apple didn't immediately respond to a MarketWatch request for comment on whether it has cut its build expectations.

In Baruah's view, a cut to iPhone builds would be the second negative signal in the past few weeks. Apple Chief Financial Officer Luca Maestri said on the company's earnings call earlier in May that the company expected similar year-over-year revenue performance in the June quarter to what it saw in the March quarter. That suggests revenue of less than $81 billion for the period, which was below the consensus view prior to Apple's report.

Opinion: Apple's 'forecast' suggests worst stretch for sales growth since 2016

"The next few months will be choppy to be sure," Loop Capital managing director John Donovan said in a separate note over the weekend.

Looking to the all-important September and December quarters, Baruah said that Apple's shipment outlook appears to be intact, and although "the risk has increased, it could eventually be lowered."

He sees some mixed data points on business, noting that Apple seems to be aiming for a greater variety of new smartphones when the iPhone 15 arrives relative to what it saw in the past few iPhone cycles, though the company appears to have brought down its expectations for what portion of September- and December-quarter iPhone sales would come from new models.

Apple's stock was down 0.5% shortly after Monday's open.

-Emily Bary

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(END) Dow Jones Newswires

May 22, 2023 09:36 ET (13:36 GMT)