Apple: Uncertain Economic Fundamentals, Time For A Downgrade


  • In Q1 2023, Apple reported a 5% decline in sales and an 11% contraction in earnings – missing analyst consensus estimates with regard to both the topline and bottom line.
  • Apple did not provide guidance going into 2023, but CFO Luca Maestri said March quarter revenue would have a similar declining trend as the December quarter.
  • Meanwhile, retailers in China are reportedly discounting iPhones by as much as $125 – in an effort to push up sales.
  • Before turning again more bullish, I would like to see Apple showing a defined commitment to new growth opportunities such as VR and/or [autonomous] driving.
  • Anchored on updated EPS assumptions through 2025, I now calculate a fair implied share price for Apple equal to $164.85.

Japan, Tokyo, Ginza, Apple Store,



Going into Apple’s (NASDAQ:AAPL) Q1 2023 earnings reporting I argued that the iPhone maker is a temporary ‘Hold’. However, reflecting on falling revenues (YoY reference) and an even sharper than expected demand slowdown that might drag well into 2023, my ‘Hold’ recommendation remains not

AAPL vs SPY 12 months performance

Seeking Alpha

Apple Q1 2023 reporting

Apple Q1 2023 reporting

Apple revenue exposure

Apple FY 2022 reporting; Author’s Graph

Apple valuation

Author’s EPS Estimates; Author’s Calculation

Apple valuation sensitivity table

Author’s EPS Estimates; Author’s Calculation

Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: not financial advise

Leave a Reply

Your email address will not be published. Required fields are marked *