The Money Morning Apple stock forecast for 2016 projects shares going sideways in the early part of the year, but new highs by the summer or fall.
The current sour mood on Apple Inc. (Nasdaq: AAPL) will bleed into January and possibly longer.
Poor guidance from several Apple suppliers over the past several weeks has had analysts chopping their Q1 2016 iPhone sales forecasts. And the negative publicity has dragged down AAPL stock. Since Dec. 4, the Apple stock price has dropped by about 9.5%.
What's happening in this quarter will get reported at the end of January. Since the December quarter is always Apple's biggest thanks to holiday sales, it tends to control the direction of the stock in the early months of the year.
A weak Q1 Apple earnings report – or worse, an earnings miss – would keep the Apple stock price down, possibly pushing it below $100.
But investors shouldn't get too distracted by all the predictions of a decline in iPhone sales in Q1. While it won't be the blowout quarter we saw a year ago, an actual year-over-year decline would be surprising.
And Apple CEO Tim Cook warned analysts in 2013 about using supplier data in their forecasts.
"The supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary," Cook said in the Q1 2013 earnings conference call.
And remember, as recently as August, analysts had themselves twisted up in knots over worries that China's slowing growth would hurt iPhone sales there. Those fears proved unwarranted, as Apple reported a 120% year-over-year rise in iPhone sales from China in Q4.
The silver lining to this month's falling iPhone sales forecasts is the gift of lowered expectations. Wall Street is factoring in this bad news now. If the iPhone can beat these lowered forecasts and sell enough to exceed last year's numbers even by a little bit, Apple stock will get a lift.
The picture brightens, though, when considering the Apple stock forecast for the rest of 2016 and beyond.
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.