Apple Stock Price and Forecast: Will AAPL stock fall on rumoured production cuts?

Apple stock remains under pressure on Tuesday as it falls again.
AAPL is rumoured to have to cut new iPhone production, according to a Bloomberg report.
Apple iPhone 13 had been looking strong based on expected preorders.

Ivan Brian FXStreet

Apple (AAPL) stock gave up more ground on Tuesday as the bearish trend persists in this one with no sign of bulls returning just yet. The broader market has been weak and Apple as the bellwether has not been immune to recent weakness. It was hoped that the launch of new products from Apple and especially the new iPhone 13 would boost the stock, but this has not transpired. While talk of pre-order numbers for the new iPhone was strong, it now appears that the old news and recurring theme for many stocks in 2021 is coming back to hit Apple yet again.

Apple stock news

Bloomberg reports that Apple could slash projected iPhone 13 production targets by up to 10 million units for 2021, citing people familiar with the matter. The Bloomberg report says Apple was poised to deliver up to 90 million new iPhone models in the last quarter of this year, but that will now be lower because Broadcom and Texas Instruments are struggling to deliver enough components. The same report also adds another headwind for Apple – Apple supplier TPK Holdings is having to modify production schedules of some subsidiaries in the Chinese Fujian province due to local government power restrictions. Global supply chain and semiconductor chip issues are affecting many companies. Apple is not alone in its problems here. Many automakers have had to also curtail production due to shortages.

The main Wall Street investment banks remain bullish however. A Reuters report details some investment bank views with Morgan Stanley saying Apple will likely receive more supply than competitors, while JPMorgan says demand and interest for the iPhone 13 is tracking better than investor expectations. Goldman Sachs though says predictions are more difficult this year. Wedbush gives more detail, saying Apple will run into a shortage of over 5 million iPhone 13s for the festive season if demand keeps up, and Wedbush expects those units to ship in Q1/December quarter.

Apple has also announced an event for October 18, no further details are available on the possible content.

Apple key statistics

Market Cap	$2.36 trillion
Enterprise Value	$2.3 trillion
Price/Earnings (P/E)	26
Price/Book	37
Price/Sales	9
Gross Margin	41%
Net Margin	25%
EBITDA	$112 billion
52 week low	$107.32
52 week high	$157.26
Average Wall Street rating and price target	Buy $167.92

Apple stock forecast

The pullback to $144.50 was now clearly our pullback short entry with this bearish fundamental news adding to the series of lower highs, making our chart bearish. The Relative Strength Index (RSI) is weak, under 50 and trending lower. The Moving Average Convergence Divergence nearly gave us a crossover buy signal on Tuesday, but this just failed.

FXStreet View: Bearish, neutral above $144.50.

FXStreet Ideas: Buy the dip at the strong support zone at $133.80. Down here is the Volume Weighted Average Price (VWAP) for the year and the 200-day moving average.

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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