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Topeka's Brian White gives in on Apple (AAPL), lowering his price target to $888 from $1,111. He...
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Thursday, January 24, 7:59 AM ETTopeka's Brian White gives in on Apple (AAPL), lowering his price target to $888 from $1,111. He remains a bull though: "Estimate resets lower the bar for the future ... At the same time, we believe the profit and sales cycle will reach bottom" in FQ2. Shares -8.9% premarket.
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This news story has 29 comments:
This idiot will now have lots of people that follow him so they can make investment decisions opposite of his calls.
$1,111 Puhleassssssse
Apple's TTM according to YHOO is 44.15. 44.15X17.46=770.86. Apple has ~$150/sh in cash, assuming they have added a little since the qtr end, so subtracting cash gets you over his target. How many companies in the S&P 500 grew as fast as AAPL? Apple at $465 assumes imminent failure and implosion.
Still Apple did not that badly. Once the spooked sellers sell off whatever they are desperate to dump on the market Apple could go up to around 480.
Hard to predict though.
The Apple share price is not working to any logic. The company grew 27% yoy. The iPad business barely three years old as a stand alone business produces more profit than Google!
Apple can't win. They beat EPS, have $54bn of revenue (would be $58bn with 14 weeks), generate an addition $16bn of cash to $137bn and still get slammed. Crazy. Brian Whites valuation is fair, anyone can see that.
Their past practices for years was not to communicate with the market and provide insultingly low guidance. The quality of the guidance under Cook has improved, but the reputation of Apple guiding low has stuck with them, so analysts have used Apples historic deviation to set the analysts numbers which are now too aggressive. Apple has simply made it to easy for the stock to be manipulated.
If that wasn't enough, Apple made an enormous mistake introducing so many new products simultaneously, and especially going into their largest sealing season. Anyone who has been around manufacturing at all knows that the start up of a new product produces higher costs and lower output until well up the learning curve. This was a massive stake because it led to low margins and insufficient inventory to meet demand. That said, rather than focusing the management error, the shills and rumor monger's focused on the tighter margins and said the competition caused the margin compression and Apple is now dealing in a commoditized market segment. Nothing could be further from the truth, but this only provides more fuel for the manipulaters to beat the stock price down.
It was fine , when you didnt need them and your growing 100% y/y on revenue, but now as growth slowed the management failed to warn its investors with that guidance and was silent as analysts made wild guesses at its business.
Listening to that conference you can sense the concern as they had NO idea that what they are saying would be a shock to investors....marketing to customers is one thing, but to investors??
On top of that...they are not giving a earning number next quarter, so now everyone's guessing that its because...its bad.
Hey..they bought 2bb value of its shares back last quarter...while the stock lost 200bb in value....ohh and another 50bb just since the earnings report.
Thats why the street is not pricing in cash......they're running the co. like a private company
Cook needs to be able to describe the vision that Apple is working towards, maybe not in great detail, but at least sketch out what the future will look like for the industry in broad brush strokes otherwise everyone is wondering if Apple has any vision at all, especially since Jobs is gone.
He didn't create AAPL, unlike the founders of AMZN or GOOG who are still alive and leading their companies. People have more faith in their management and the stock prices reflect that.
Apple just hasn't been responsible, and their disdain for shareholders just seems to continue. That said, where is the Board, where is the new Chairman who's supposed to be a professional. Apple has a problem, and it's Apple, not the competition!!
I realize Jobs didn't talk to the market, but that was then and this fiasco is now....Jobs wouldn't even be able to get by with now if conducted himself the way he had previously. These people need to grow up and become responsible.
1111 to 888 - whatever whatsyourface.
Mr. Kass
Everybody said about the "cash pile"- may be Apple need a money manager. Maybe Apple need to borrow some money so it could deduct some interest payment and at the same bring home some money from abroad so the additional tax on the repatriated money could be balance against the deduction on borrowed money.
The supply crunch, made quite ruckus
Apple's entry in to China through China Mobil
Every other smartphone are already in China
Those emerging countries won't be able to buy the costly Apple phone, may be the lower priced phones will bring down the "gross margin"
Samsung is on Apple case 24 hours a day and they are winning
no new innovation from Apple
the gradually lowering of "gross margin" from mid forty to high 30's
the "management shake" up, the chief engineer and the marketing guys
Conclusion: the management should be more attuned to the street, and may be Apple need more senior level executives to care for the investor, because street has been very vocal about what the street needs from Apple.
I can be a slick analyst too.
My estimate is 666, because that's what the devil wants.