Apple slips as Wells Fargo cuts estimates on increased signs of 'demand weakness'
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Apple (NASDAQ:AAPL) shares slipped fractionally in premarket trading on Monday as Wells Fargo cut its 2023 estimates ahead of the company's first-quarter results later this week.
Citing a 12% gain in the stock year-to-date, along with signs of "increasing consumer demand weakness," analyst Aaron Rakers lowered his 2023 revenue and EBIT estimates to be 5% and 8% below consensus. He also lowered his 2023 and 2024 earnings per-share estimated to be $5.81 and $6.50, down from a prior view of $6.56 and $7.77, respectively.
Rakers also lowered his forecast for the next quarter, as he now expects $88.5B in revenue and earnings of $1.29 per share, below the consensus of $97.B in revenue and $1.50 per share in earnings.
"Overall demand push-out vs. weakening consumer demand ... and uncertainties over the pace of a post-COVID China lock-down recovery leave us with an incrementally cautious stance through 2023ânow [estimate calendar 2023 iPhone shipments] at 216.4M, or -7% [year-over-year], or roughly 10% below consensus," Rakers wrote in a note to clients.
A consensus of analysts expect Apple (AAPL) to report quarterly earnings of $1.96 per share and $122.05B in revenue on February 2.
Rakers also said that the Mac is likely to be impacted by weaker consumer confidence and spending, but it's likely that Apple (AAPL) will continue to outshine the PC market and continue to take share, due in part to performance advantages from its M-series of processors.
On the company's Services business, he expects Apple (AAPL) to generate 4% year-over-year growth in the first-quarter, but added concerns about the App Store and total active device installed base growth could swing the forecast.
Rakers also expects the company's long-awaited mixed reality headset to be introduced in the "coming months," with initial sales set for the second-half of the year.
"We think Apple's internal silicon M2 capabilities and the ability to tie together its iOS ecosystem are key differentiators," Rakers added. 
Last week, Deutsche Bank trimmed its 2023 estimates for Apple (AAPL) ahead of the iPhone maker's fiscal first-quarter earnings release.