CEO Tim Cook sought to place the blame for worse-than-expected sales on China’s slowing economy and President Donald Trump’s trade war. He also acknowledged that iPhone sales are slowing, as consumers wait longer to replace their older smartphones. Some opted to take advantage of Apple’s low-cost battery replacement program rather than upgrade their devices.
Shares closed at $142.19, down nearly 16 points on the day — their biggest single-day loss in six years. The stock was last at this level in February 2017.
After the bombshell announcement Wednesday by the fourth-largest public company, the Dow Jones Industrial Average shed 660 points, extending the slump that saw it last year post its worst showing since 2008. The S&P lost 2.5% of its value, and the NASDAQ dropped 3%.
Several analysts slashed their price targets for Apple in the wake of the news.
“Fears about iPhone have been confirmed, uncertainty about the severity and duration of iPhone troubles will linger, and the other shoe is about to drop on Services growth, particularly for its highest margin drivers,” wrote Macquire analyst Benjamin Schachter.
Schachter downgraded Apple stock to “neutral” from “buy.” He cited concerns about not only iPhone sales but trend lines in the company’s services unit, which encompasses iCloud, Music and Apple Pay. Macquarie’s 12-month target for Apple’s stock price is $149.
“Apple’s guidance cut confirms our negative view on demand in China that we have been flagging since late September,” wrote Goldman Sachs analyst Rod Hall, who similarly reduced Apple’s 12-month price target to $140.