Apple (AAPL) PT Lowered to $165 at Goldman Sachs; Apple TV+ Trial to Hurt ASPs, Gross Profit and EPS

(Updated - September 13, 2019 6:24 AM EDT) (updated to expand analyst comments)

Goldman Sachs analyst Rod Hall lowered the price target on Apple (NASDAQ: AAPL) to $165.00 (from $187.00) while maintaining a Neutral rating.

• Apple TV+ Trial accounting likely to have a material negative impact on ASPs, gross profits and EPS though cashflow should be unchanged
• "We believe that Apple plans to account for its 1-year trial for TV+ as a ~$60 discount to a combined hardware and services bundle. This method of accounting will likely result in lower up front ASPs and margins and then higher services revenue growth."
• Assuming 25% gross margin contribution from free trial TV+ revenues results in a negative calculated impact to EPS of 16% in FQ1’20 and 14% for FY20 in total but, importantly, no impact to cashflow

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