Piper's Munster Lowers Apple (AAPL) Estimates; Remains Top Pick

Piper Jaffray analyst Gene Munster lowered estimates on Apple (NASDAQ: AAPL) but said the stock remains its top pick for 2016.

The firm is lowering Mar-16 iPhone estimates to 55M from 62.5M and June from 48.5M to 45M due to the collection of negative data points from Apple suppliers regarding March quarter estimates and the firm's own supply chain checks.

"While we are lowering our March iPhone expectations, we believe the current price of the stock (trading 7.8x CY16E EPS ex-cash) already reflects low expectations for iPhone units in March," Munster said.

He added, "Looking back to January 2014, during the middle of the iPhone 5S cycle (we are now in the middle of the iPhone 6S cycle), AAPL traded around 9x forward EPS ex-cash. As a result, we believe that shares of AAPL will work after the Dec-15 report/Mar-16 guide once the uncertainty around March iPhones is removed from the story. We believe that given sentiment, even a Mar-16 guide implying 45-50M iPhones would likely be a relief for shares."

FY 2016 EPS goes from $9.51 to $9.23.

The firm maintained an Overweight rating and price target of $179.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $98.53 yesterday.

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