According to a report by Bloomberg earlier this week, citing an internal memo, Apples largest iPhone assembler, Foxconn, intends to reduce its 2019 expenditures by CNY 20 billion (or $2.885 billion), since it faces “a very difficult and competitive year”.
Apple shares closed lower for a third consecutive trading session on NASDAQ on Wednesday. The stock edged down 0.11% ($0.20) to $176.78, after touching an intraday low at $176.57 and an intraday high at $180.24.
Shares of Apple Inc have surged 4.46% so far in 2018 compared with a 0.89% drop for the benchmark index, S&P 500 (SPX).
In 2017, Apple’s stock gained 46.11%, thus, it again outperformed the S&P 500, which registered a 19.42% return.
Formally known as Hon Hai Precision Industry Co Ltd, the Taiwan-headquartered manufacturer said that a regular annual review was being conducted to its 2019 budget.
“The review being carried out by our team this year is no different than similar exercises carried out in past years… (to ensure we are) aligned with the current and anticipated needs of our customers, our global operations and the market and economic challenges,” Foxconn said in a statement, cited by Reuters.
According to Bloomberg, expenditures at the firms iPhone business will have to be reduced by CNY 6 billion in 2019, while nearly 10% of Foxconns non-technical staff will probably be laid off.
Foxconn was also the latest company to raise concerns over demand for Apple Inc’s flagship products. Screen manufacturer Japan Display and US chip maker Lumentum were among the first companies to revise down their forecasts, after which financial warnings emerged from UK chip maker IQE, Qorvo Inc as well as from AMS of Austria.
Estimates by sector analysts pointed to a 20-30% cut in orders to Apples suppliers in Taiwan earlier this month, mostly due to weak demand for the companys iPhone XR and iPhone XS Max models.
According to CNN Money, the 32 analysts, offering 12-month forecasts regarding Apple Inc’s stock price, have a median target of $232.90, with a high estimate of $310.00 and a low estimate of $165.00. The median estimate represents a 31.75% upside compared to the closing price of $176.78 on November 21st.
The same media also reported that 21 out of 41 surveyed investment analysts had rated Apple Inc’s stock as “Buy”, while 17 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.
Weekly Pivot Levels
By using the traditional method of calculation, the weekly levels of importance for Apple Inc (AAPL) are presented as follows:
Central Pivot Point – $193.10
R1 – $200.28
R2 – $207.02
R3 – $214.20
R4 – $221.37
S1 – $186.36
S2 – $179.18
S3 – $172.44
S4 – $165.69
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