Apple Seen As Hitting IPhone Speed Bump In 2016

Apple Inc. has been on a wild ride in terms of iPhone growth this year, but one analyst is warning of speed bumps ahead. Pacific Crest Securities analyst Andy Hargreaves raised his second-quarter earnings estimates slightly above the consensus estimate on Monday, and lifted his fiscal 2015 and fiscal 2016 iPhone predictions. He also slightly raised his Apple Watch unit estimate, pointing to strong initial response. But he says the Cupertino-based company will likely "see growth challenges" in fiscal 2016, which will likely "prevent meaningful earnings growth and multiple expansion," according to the report. Hargreaves, who said Apple is fairly valued at current stock prices, set a 12-month "fair value" price target of $123 on Apple. Its shares closed at $124.75 on Friday. They have risen 15% over the last three months, and were up 0.5% in premarket trade on Monday. "Declining new iPhone users and normalized replacement rates are likely to drive iPhone units down in F2016, which is likely to prevent material EPS growth," he said.