AAPL: Street Likely High for FY19, Growth Returns in FY20
We are publishing an updated Apple model. See the model here. Three quick observations:
- Following Apple’s update this week, we believe the Street remains slightly high for the balance of FY19. Specifically, Mar-19 overall revenue growth appears to be in a range of -7% to +4% y/y. We believe the midpoint of Apple’s Mar-19 revenue guidance will fall closer to the expected growth rate in Dec-18 (-5% y/y). As Street models adjust, we expect the changes to be a fractional, near-term negative to shares of AAPL.
- Greater China was likely down 36% y/y in Dec-18 based on comments made in Cook’s letter to investors. This compares to Greater China growth of 16% in Sep-18, 19% in Jun-18, 21% in Mar-18, and 11% in Dec-17.
- Growth returns next year. For FY20, we estimate 7% revenue growth compared to -3% for FY19.
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