AAPL: Apple Inc. Shares Downgraded to ‘Neutral’ Amidst Forecasting Concerns

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After the release of FYQ1 figures, Apple's forecasting is worrying analysts. Image credit: http://s860.beta.photobucket.com/user/chattahoochee1/profile/

After the release of FYQ1 figures, Apple’s forecasting is worrying analysts. Image credit: chattah

Apple Inc. shares have been downgraded to ‘neutral’ status by analysts at Robert W. Baird following concerns over the firm’s financial forecasting for the year ahead. The share price target has been cut from $570 to $465. Apple shares this week remain stable so far, albeit in a steady decline from the record highs seen in the fall of 2012.

Apple Shares: Why Are Analysts Concerned?

Downgrading AAPL shares from ‘buy’ to ‘neutral’ is a reaction to a growing concern over the ability of the company to meet predicted revenue targets set for the remaining quarters of 2013. Revenue for the second quarter has been estimated by analysts to reach $45.63 billion, whereas Apple has predicted revenue of between $41 billion and $43 billion dollars in Q2.

Current sales trends are also a concern, with many wondering whether the surge in both iPhone and iPad sales is sustainable and likely to continue throughout the year, with no planned launches or refreshes expected in the coming months. Sales of products outside the US are also a concern, with analyst William Power of Robert W. Baird predicting a drop in iPhone shipments, despite Apple forecasting maintaining current levels of exports throughout the second and third quarters of the fiscal year.

Apple Q1 Reports: Record Sales; Dip in Revenue

Despite having sold record numbers of over 47 million iPhones and 22.9 million iPads this first quarter, Apple reported a net profit of $13.1 billion, which is down from the $13.87 reported in the first quarter last year. Sales of Macs and iPods were down 21% and 18% respectively. In addition, challenges from emerging technological rivals have kept Apple’s prices down, which may impact the profitability of their products, and is a trend that looks set to continue throughout 2013. (Note: The first quarter of this year had one less week than last year, which contributes to the year-over-year decline.)

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