Apple declines after Wells Fargo lowers expectations due to more indications of "demand weakening."

Prior to the release of the company's first-quarter results later this week, Wells Fargo reduced its 2023 predictions, which caused Apple (NASDAQ:AAPL) shares to slightly decline in premarket trade on Monday.

Analyst Aaron Rakers revised his 2023 revenue and EBIT estimates to be 5% and 8% below consensus, citing a 12% year-to-date increase in the stock and indications of "growing consumer demand weakness." Additionally, he revised his estimates for 2023 and 2024 profits per share downward, from $6.56 and $7.77, respectively, to $5.81 and $6.50.

Rakers also decreased his projection for the upcoming quarter, now expecting $88.5 billion in revenue and $1.29 per share in earnings, which is less than the consensus of $97 billion in revenue and $1.50 per share in earnings.

Rakers stated in a note to clients that "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 2023." Rakers currently estimates calendar 2023 iPhone shipments at 216.4M, or -7% [year over year], or roughly 10% below consensus.

On February 2, analysts generally anticipate Apple (AAPL) to post quarterly earnings of $1.96 per share and $122.05 billion in revenue.

Rakers added that while lower consumer spending and confidence are expected to have an effect on the Mac, Apple (AAPL) would likely continue to outperform the PC industry and gain market share, in part because of the performance benefits provided by its M-series processors.

He projects 4% year-over-year growth for the company's services division at Apple (AAPL), but more worries about the App Store and the expansion of the installed base of active devices could change the projection.

Rakers anticipates the long-awaited mixed reality headgear from the firm to be unveiled in the "coming months" and to begin selling in the second part of the year.

Rakers continued, "We believe that Apple's own silicon M2 capabilities and its ability to bind its iOS ecosystem together are critical differentiators.

Prior to the announcement of the iPhone manufacturer's fiscal first-quarter earnings last week, Deutsche Bank reduced its 2023 predictions for Apple (AAPL).