Apple stocks slide as HSBC lowers price target

Apple's shares were down 2.5% on Monday after trading, after HSBC cut the technology giant's price target for fear of exposure to the US-based trade war China.

Erwan Rambourg, senior co-head of consumer and retail research at HSBC Global, has reduced Apple's target to $ 180, from $ 180 to $ 180, while maintaining a "reduced" rating in a context of recovery of growth risks and Chinese tariffs. Apple's fall on Monday was compounded by a massive sell-off in technology stocks after Google suspended some commercial activities with Chinese telecom giant Huawei over the weekend.

The analyst's note suggested that recent tariff increases on imports of Chinese products into the United States and Beijing's retaliation could force Apple to raise its prices, resulting in lower demand given consumer sentiment that recent iPhone launches are "too expensive". a blow on the margins.

"Secondly, in the Chinese market, consumers are likely to accelerate the switch to smartphone substitutes, especially by turning to local brands with comparable features (Huawei, Xiaomi)," Rambourg added.

The note also said that the new services and effective communication of Apple's management to divert the attention of investors on them, can not compensate for the contraction in demand for the core iPhone product of # Apple, another decisive factor in reducing price estimates.

Apple's shares fell 10% since May 1, 2019, the day after the results were released, and indicated that services were showing strong growth.

However, Rambourg said that "an encouraging quarter in which iPhone sales fell by 17% at a time when the stock was trading at its highest level in three years in terms of forward valuation." the EP (price / earnings ratio), which we find very counterintuitive. "

An Apple spokesperson did not respond immediately when contacted by CNBC.