Shares of Apple Inc (NASDAQ: AAPL) are down 4.0% on Friday after a Morgan Stanley analyst said a slowdown in App Store revenue will weigh on the multinational’s Q3 results.
Apple could miss revenue growth target
According to Katy Huberty, tougher comps in June could see Apple falling short of the bank’s forecast for a 15% growth in its net revenue this quarter.
She’s sound the alarm only for the near-term, though, and expects App Store revenue to pick up again in late 2022. The analyst has an “overweight” rating on AAPL with a price target of $195 a share at present.
In April, the American multinational also warned the macro headwinds, including lockdowns in China, the Ukraine war, and supply constraints could shave up to $8.0 billion of its sales in fiscal Q3.
Jim Cramer reacts to the note
Commenting on Huberty’s note this morning on CNBC’s “Squawk on the Street”, famed investor Jim Cramer agreed the weakness in App Store could be a significant headwind for Apple stock.
App store numbers are really bad. The only place they’re good is America. See China, it impacts App Store. Frankly, Apple is the weak link in FAANG right now because it sells in China and the lockdown is not really over.
Apple is currently trading at a PE multiple of 23.60. According to Motiur Rahman – financial analyst at Invezz – AAPL is a recommended buy at prices below $150 a share.
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