Piper Sandler reduced its estimates for Apple's (NASDAQ:AAPL) December quarter ahead of the iPhone maker's earnings next week.
The analysts, who reiterated an Overweight rating and $220 price target on Apple shares, said one of the reasons for the cut is that iPhone checks indicate demand is skewed towards Pro models.
"The primary reasons for our cut are a tough global phone environment, initial weakness for iPhones in China, and slightly tough compares for Mac and iPad," the analysts wrote.
"All this, coupled with a tough macro is prompting us to be slightly below our previous estimates, which were already slightly below consensus. At this time, we are ~$2.7B below the street for December 2023 quarter expectations, with the largest factor being tough China comps given local competition and a lackluster economy," they explained.
The analysts added that Mac and iPad should also put pressure on street numbers. Overall, Piper Sandler believes that India will provide some recourse versus declining China sales, but they don't see it being enough to offset global and China weakness. "We see India gaining 3-4% while China declines 5-6%," the analysts said.