Apple's stock price suffered a heavy blow at the beginning of 2024. Compared with iPhone14 and iPhone13, the popularity of iPhone15 has declined, which may be one of the reasons. J.P. Morgan noted in a report on Monday that Apple has had a rocky start to 2024, with its stock price falling 6% in the first week. The reason for the stock price decline is apparently "pessimism surrounding the lack of momentum in iPhone sales."
Analysts believe that the perception of iPhone 15 is "worse" than iPhone 14 and iPhone 13 because Huawei is expected to re-emerge in the important Chinese market.
According to analysts, iPhone revenue will fall by 2% year-on-year in 2023, with iPhone revenue falling by 8% in the first quarter, a bad start.
Things are different in 2024, and Apple's iPhone revenue will grow in the first quarter. In addition, JP Morgan's forecast for iPhone revenue is "flat", which means a slight year-on-year decline starting in the second quarter.
Without taking into account the competitive threat posed by Huawei to Apple, JPMorgan still believes that Apple's competitors will grow steadily, and its impact has been factored into its forecast of limited iPhone revenue growth in 2024.
Even so, iPhone revenue in the first quarter still has room to rise "to change the linear relationship of Apple's stock rating downgrade." JPMorgan expects a 25x multiple to be the floor valuation and that multi-year iPhone revenue expectations will "stabilize in a flat range."
However, although concerns about the momentum of iPhone 15 have increased recently, JP Morgan believes that "supply chain feedback shows strong iPhone sales in C4Q23 and only a modest decline in iPhone sales in C1Q24, which is a positive preparation for profitability."
The supply chain believes that iPhone production will reach 85 million units in the fourth quarter of 2023 and 48 million units in the first quarter of 2024, which indicates that sales in the fourth quarter of 2023 will be more than 70 million units, while the market consensus is 74 million units.
JP Morgan rates Apple an "overweight" rating with a price target of $225.
JPMorgan's comments come after Piper Sandler downgraded Apple to "neutral" due to concerns about iPhones and macroeconomic weakness in 2024.