Yesterday, according to the Bloomberg ranking, 5 analysts, the wall street recommended to sell the shares of Apple Inc: this is the highest number of SELL recommendations on shares of the company since 1997. What is the reason? A number of financial and operational performance Apple has significantly deteriorated against the backdrop of the trade conflict between the US and China.

In January of this year, the IT giant for the first time in nearly the last 20 years have reduced their expectations for revenues in the first quarter of 2019 fiscal year ending December 28, primarily because of lower sales in China. A similar situation was observed in the II quarter of 2019 fiscal year ending March 30, following which Apple recorded a revenue decline of 5.1% yoy to $58 billion, and net profit by 16.4% yoy to $11.6 billion

At the same time, despite the deterioration of financial performance in the last two quarters, with the beginning of the year, Apple shares rose 28% to $200,02 for a paper on the background of a growing trend on U.S. stock exchanges. In addition, support for the share prices of Apple had a procedure to repurchase the shares that the company holds may 2018, in the amount of $100 billion While in may this year, Apple said that in addition buys its own shares at $75 billion, and also announced an increase in quarterly dividend by 5% yoy to us $0,77 per share.

Nevertheless, more and more analysts agree that these measures are no longer sufficient for further growth in the value of Apple shares. Last week Citibank announced that sales of Apple in China can be reduced by half due to less favourable image of the company amid trade disputes between Beijing and Washington. In January-March to 17.6% of the company’s revenues accounted for the greater China.

Thus, taking into account the negative dynamics of sales of Apple in the medium term, the company’s shares will probably shows little growth or decline will show.

Author: Aleksandr Alekseevskiy — analyst QBF

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