By David Berman
It’s hard to know what to make of Bespoke Investment Group’s list of the most beloved stocks within the S&P 500. Bespoke ranked them by first winnowing the list down to those covered by at least 10 analysts, then sorting them according to the percentage of buy recommendations.
Curiously, Apple Inc. (AAPL) ranks only ninth on the list with an 89 per cent buy rating, two notches below JPMorgan Chase & Co (JPM). Agilent Technologies Inc. (A) is at the top, with a 94 per cent buy rating.
But what’s interesting in the case of Apple is that while analysts remain bullish on the stock with their recommendations, their target prices don’t back up this enthusiasm: As Bespoke itself noted in a blog post on Wednesday, Apple shares are quickly approaching the consensus target price among analysts, meaning that there is little apparent upside gain.
According to Bloomberg, the average price target is now $610 (U.S.). While that might have seemed lavish several weeks ago, Apple shares briefly broke the $600-barrier on Thursday, before retreating, suggesting that the average analyst sees a gain of just 1.7 per cent over the next 12 months. Bank of Montreal’s analyst has a $590 target on the stock, which implies no gain at all.
To be sure, analysts only look offside because Apple’s share price has surged 44 per cent this year, overtaking their enthusiasm. You better believe that target-price upgrades are coming – or else this beloved stock will soon be looking very unloved.
On another note, technical analysts are going to be giving Apple a very close look after Thursday's activity. The shares peaked in the day exactly 1 cent above $600 before retreating.