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NOMURA: Apple Is Moving Into Its 'Ex-Growth' Phase, And The Stock Could Go As Low As $336

Joe Weisenthal

There are sure to be lots of brutal Apple takedowns from Wall Street today.

Here's one from Nomura, which declares that the company is now in its "ex-growth" phase, which is very ominous sounding.

The weak Q2 dynamics seem to support our view that Apple is moving into an ex-growth phase in which unit growth is likely to come increasingly at the expense of gross margin declines. The net effect is limited earnings growth, EPS that likely tops-out at $50, which is likely to attract a multiple little better than comparable ex-growth peers such as Microsoft and Cisco. An 8x ex-cash multiple on our EPS forecast of $50 plus $89 in excess cash drives our fair value of $490.

This table shows how Nomura values the stock:

And in a real ice age scenario, it could get even worse.

Potential downside risk to $336
If we exclude the excess cash, as some investors may do, then there is downside to the stock to $400. Moreover, if iPhone gross margins fall to 40% vs. our 47% forecast, then EPS could fall to $42 and fair value could decline further to $336.

SEE ALSO: Gundlach: Apple could go to $300 >

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