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More on Apple: Shares could be pressured by a downgrade to Neutral from Citi. The firm says...

More on Apple: Shares could be pressured by a downgrade to Neutral from Citi. The firm says checks indicate Apple has cut its March quarter iPhone 5 orders following a 45%-50% increase in monthly output from October to December. UBS recently said checks suggested the iPhone 5's build rate would fall sharply in the March quarter, while Jefferies claimed iPhone component suppliers saw big order cuts last week. Citi, which started Apple at Buy on Nov. 26, also thinks Samsung is doing very well. Update: Morgan Stanley responds by pointing to encouraging U.S. iPhone/iPad survey data. But a gap has opened up between U.S. and foreign iPhone share trends.
Comments (51)
  • So this is the confirmation that Apple will blow out the qtr. More fud to drive $AAPL down for the "smart money" to make a ton of money in the next QTR.
    16 Dec 2012, 09:50 PM Reply Like
  • Not sure if there is a concerted FUD effort from the sell-side. I'm thinking the Citi analyst is just an idiot.
    16 Dec 2012, 11:10 PM Reply Like
  • Three weeks ago these same Citi analysts started the stock out at a "Buy" with a $675 price target. THREE WEEKS AGO???

     

    If that doesn't tell you these idiots don't know what they are doing, I don't know what else I can say?
    17 Dec 2012, 12:37 AM Reply Like
  • Smart money stopped out at $650
    17 Dec 2012, 06:13 AM Reply Like
  • My guess is that this downgrade is timed to offset the good news from Apple of the record 2 million iPhone 5s sold in China ! Seems Citi has a short position before the China results were released and now Citi needs to try to protect this short position. Look a for a short squeeze today as other firms take advantage of Citi's weak short position.

     

    Apple's profits keeps growing at a healthy rate and that is what makes AAPL a good investment.
    17 Dec 2012, 08:10 AM Reply Like
  • Agreed, only 1-2 more analyst downgrades/neg. revisions until the bottom, getting close. 500 is strong support, but I see capitulation selling drop it down to 475-480 oh so very briefly, before starting the rockets for the ride back up!
    16 Dec 2012, 09:58 PM Reply Like
  • 481.59 is the Fibonacci target on the weekly chart measuring from the 11/12 week low to the 12/03 week high. With this downgrade don't expect anything to hold until that target is reached
    17 Dec 2012, 12:01 AM Reply Like
  • Where the Fibonacci series is fitting in this. Fibonacci is just a arithmetic series where a=b+c with a = actual, b & c = the 2 previous numbers. Applying a mathematic or arithmetic formula to some thing must have any reasoning behind it. Dan Brown used it for some guessing purposes. Now why do u think it has a sense ? Woodoo prediction ?
    17 Dec 2012, 05:08 AM Reply Like
  • Many traders use Fibonacci levels to calculate support/resistance and targets. It's not a woodoo prediction, if you learn how to use Fibonaaci levels, you will be amazed to see the results. Google it; you may be able to read up a little bit about that
    17 Dec 2012, 09:41 AM Reply Like
  • Have to agree Doc
    Same group that initiated DELL last week at BUY. Time to buy AAPL when the "analysts" start cutting it.
    16 Dec 2012, 10:11 PM Reply Like
  • Well let me see, except for two of the last 8 March quarters, the March quarter has always done worse than the December quarter. Is anybody, except Citi, surprised by this?
    16 Dec 2012, 10:12 PM Reply Like
  • Some two bit analysts like to stay in the spotlight. Why did Citi analyst started coverage on Apple with a buy on Nov 26 suddenly downgrade the stock not even 3 weeks later? What type of research did he do?
    16 Dec 2012, 10:21 PM Reply Like
  • On the bright side, at least Apple doesn't have unrealistic expectations that it has to beat now.
    16 Dec 2012, 10:23 PM Reply Like
  • The citi analyst is now actually 3 (analysts covering aapl), doesn't mean they are any less clueless though.

     

    The first accurate 'supplier check' will probably be the last.
    16 Dec 2012, 11:50 PM Reply Like
  • Bulls will never admit defeat. Apple is a buy at about 400.
    16 Dec 2012, 10:32 PM Reply Like
  • So when Apple is in the $400's , we will hear people say it is a buy in $300's? I read similar comments when Apple was in the low $600s. Some bears never give up.
    16 Dec 2012, 10:36 PM Reply Like
  • AAPL is a buy now, so yes it would be a buy at 400. Bull or bear, even you have a price you would buy at...
    16 Dec 2012, 10:37 PM Reply Like
  • Apple has announced they sold 2 million iPhones in China the first weekend (a record of course). So those two people in line at the Apple store? Turns out they each bought 1 million phones!

     

    I think the FUD has about run its course. It is becoming increasingly obvious they will have stellar earnings this quarter.
    16 Dec 2012, 11:01 PM Reply Like
  • I love it! http://tinyurl.com/al5...
    17 Dec 2012, 12:33 AM Reply Like
  • Oh DM, you made my day, would you like a million iPad minis for Christmas?

     

    On the serious side, I will say Apple, in my view, made a slight mistake on the large iPad front. They should have made the next upgrade svelte, like the mini kept the resolution and therefore charging time relatively unchanged then added "retina" once they solved power consumption issues. I believe that more than anything else, is causing some softness in large iPad sales.

     

    That being said, no competitor has taken advantage of this slip up in a major way, and I expect Apple will correct the issue within the next few months and we will be back on track (if we ever really got off it)
    17 Dec 2012, 11:42 AM Reply Like
  • Applocrat, the iPad situation is fascinating to me. They came out with the Retina display and some folks said this was no big deal. Then when the mini came out without Retina, it was panned as being sub-par by these same people. But in the meantime not only are folks clamoring for the mini, but the iPad 2, which of course has non-retina display, continues to sell well.

     

    My take on this is that many people don't really need a crystal clear display. It's nice that Apple is continuing to push the envelope, but the pre-retina display is fine for most purposes. This gives Apple many possible configurations going forward. If a non-retina display continues to be a valid option, they can get a lot thinner and lighter over time.
    17 Dec 2012, 12:23 PM Reply Like
  • I guess that depends on whether you believe the #s and Morgan Stanley http://yhoo.it/SCpxPi

     

    or Citigroup who initiated coverage only 3 weeks ago w/a Buy at 675. If these people can't see 3 weeks in the future why does anyone listen to them?
    16 Dec 2012, 11:16 PM Reply Like
  • Dean, Citi created this downgrade report to support their current large short position on Apple. A short squeeze here would be a just reward for Citi's arrogance and incompetence.
    17 Dec 2012, 08:21 AM Reply Like
  • Time to waste my time on another stock, APPL was a fun ride! I'll re-visit at about 425
    16 Dec 2012, 11:45 PM Reply Like
  • Poor Glen Yeung, Walter Pritchard, and Jim Suva at Citi... They just can't catch a break (or apparently maintain their conviction for more than 3 weeks). Their collective wisdom figured out that Apple will build fewer iPhones after the holiday season... wow. Thats a news flash. Retailer sells less product after Christmas. Why hasn't anyone else caught on to this trend? And why didn't they know this 3 weeks ago?

     

    Right after these three guys announced their downgrade Tim Cook announced that Apple is killing it in China. TWO MILLION sold in the opening weekend. This is firm validation of demand in China. And Morgan Stanley also lauds Apple... (see link in the article).

     

    And lets talk about margin compression... SO WHAT. Of course margins will compress. However, demand as a whole is growing. I would rather see 25% margin on $10bb in sales versus 45% margin on $1bb in sales (just making up numbers here for illustrative purposes folks, don't flame me...)

     

    And lets not forget about the cash. Unless you believe in smartphone armaggedon for Apple, margins could compress, and sales growth could stop, yet the cash would still pile up in the billions. Thats billions. With a B.

     

    And don't forget about the TV. Its coming. And Apple will sell 100bb of them... at huge margins... and it will build the economic moat around the house.... giving Apple access to search... retail... and more... and people who buy the computer will buy the TV... and the phone... and the iPad. Hell, even Samsung's own CEO said HE USES MAC PRODUCTS AT HOME, BECAUSE THEY SEAMLESSLY SYNCH! That, my friends, is the key, and it was Steve's vision.

     

    The sad part is that many just don't get it. Apple will continue to expand, dominate and innovate, yet when the TV comes out, and Apple sells billions of dollars worth of them, and everyone is rushing to copy them, the naysayers will wring their hands and go "oh dear, but what will they do next?", all while paying ridiculous P/Es for companies like money-losing Amazon.
    17 Dec 2012, 01:30 AM Reply Like
  • Bravo! Couldn't have said it better.

     

    We will ALL know in mid-January when AAPL reports earnings. If I'm wrong and Apple crashes with earnings, I will come on SA and publicly call myself a "naive fool" for not believing the writing on the wall. Will all the Apple Bears on this site commit to the same response if Apple blows out earnings like last January? I doubt we will hear from any of them. Personally, I'm not worried too much.
    17 Dec 2012, 01:41 AM Reply Like
  • This quarter is meaningless to aapl valuation. That is clear.
    17 Dec 2012, 02:29 AM Reply Like
  • You sound like Howard Dean when he was trying for the Democratic nomination.
    17 Dec 2012, 02:31 AM Reply Like
  • analysts are such jackasses.

     

    If you did the opposite of what they say, most of the time, you'd make a good profit.
    17 Dec 2012, 01:56 AM Reply Like
  • The guy to tell you where aapl is going is Robert Prechter.
    17 Dec 2012, 02:27 AM Reply Like
  • I watched the NFL game Sunday night and noticed a lot of commercials with Apple products. Oh and they weren't paid for by Apple. The commercial for AT&T showed parents with the iPads they were going to give their sons for Christmas. There was a Verizon ad also featuring Apple products.
    Apple products are so dominant that companies that sell services that run on them feature them in their expensive TV ads.
    I figure Apple already will pay me about $200 per month in dividends which will increase and compound even if AAPL stays at the share price of $500 or so for eternity. Boo hoo, I am so *scared*.
    I actually think guys post here who have no money nor stocks, nor experience in the world.
    Buying Apple today is like buying Deere, Caterpillar, Exxon, a few decades ago. Enjoy the ride and see your wealth grow.
    First comes huge capital appreciation of your shares, then dividends on all of those shares. It's just beginning, it's not ending.
    17 Dec 2012, 05:49 AM Reply Like
  • Citi analyst are clueless I read his report and they said the buy rating on Nov 26 was seen a short term opportunity for the stock to bounce and now they decreased the PT to $575. Also Morgan Stanley analyst
    maintain its price target due to an upbeat estimates for demand on Iphones and Ipad in the US
    17 Dec 2012, 05:53 AM Reply Like
  • I wouldn't be surprised if the Apple Maps problem slowed sales. As someone who works in a different place almost every day, I depend on my phone's maps to get me to location on time. I did not upgrade to the new iOS because it did not have Google Maps, and I would not have bought the iPhone in the first place if I couldn't get Google maps.
    Maybe the new release of Google maps for iOS will bring buyers back.
    17 Dec 2012, 05:55 AM Reply Like
  • I trade stocks and options.

     

    Getting tired of all the noise in AAPL stock. Those analysts have clients that missed the run-up before so want to drive the price down to make themselves look good. Those analysts under a different name will be the first to buy AAPL when the short-covering takes it back over $600.
    17 Dec 2012, 05:57 AM Reply Like
  • Sales of iphone 5 in China:
    http://on.ft.com/T1vH8o
    17 Dec 2012, 05:57 AM Reply Like
  • Too much noise on AAPL stock. Those analysts just have clients that missed the run-up before. The the analysts will be the first to buy before the short-covering takes it back over $600
    17 Dec 2012, 05:57 AM Reply Like
  • According to the underlying report, the Citi PT was $575 not $525.
    17 Dec 2012, 06:13 AM Reply Like
  • Maybe Citi didn't get the iPhone sales count in China just announced of 2MM units in the first weekend. Maybe the Chinese didn't have to wait in the snow to buy their iPhone. With WMT selling the iPhone for $129 now, Apple's Jan. numbers could exceed $15 in earnings per share (or about $1 billion in earnings, not revenue, every 6 days). I'll stick with those odds.
    17 Dec 2012, 06:16 AM Reply Like
  • Hmmmmm! So Citi downgrades Apple right after it starts buying it? Well it just goes to show Citi is hardly even worth following anymore......split and reverse split or whatever they use to muddle the numbers Citi is still not worth it's price (somebody needs to put Citi out of its misery.......where is Bain Capital when you need them!)
    17 Dec 2012, 06:17 AM Reply Like
  • Citi just created a “a three people special team” to initiate Apple coverage on November 26 (less than a month!!). They started with a “buy” rating (wow what a acomplishment! to give a Buy to Apple..) with PT 675 with expectations of 20-50% of share price appreciation in twelve months. Now, in just less than a month, the Citi “A-Team” released a downgrading of Apple to neutral and PT to 575 because they don’t Think iPhone 5 demand Is Great. Also, they fear ““near-term supply-chain order cuts,” and “bring into question the strength of iPhone 5,” as well as drawing attention to the “risks in the Apple story”!!!!

     

    Really, Citigroup reputation is in real trouble with this bad timing award of downgrading Apple just before Apple announced record sales of Iphone 5 in China!
    17 Dec 2012, 06:20 AM Reply Like
  • FYI - anecdotal data from this weekend visit to local Best Buy in Minnesota during holiday shopping - Apple Mini completely SOLD OUT for all models (except some black 64 MB models still available) on Saturday across the entire 5 state area in the Midwest according to Apple employees.

     

    Seems Christmas consumer demand for Apple products is THROUGH the ROOF!
    Draw your own conclusions, I've already made mine.
    17 Dec 2012, 06:21 AM Reply Like
  • Don't quite get this. The previous notification/article indicates 2 million units were sold in China since the Friday open and then this? Something is not quite right.
    17 Dec 2012, 06:21 AM Reply Like
  • This is a gift folks! The selloff is way, way overdone. Remember, the analysts no very little, and are usually wrong. Citi was pumping Apple at the wrong time, and now they are likely leading their clients to get whipsawed. Act on the facts. Apple sold over two million IP5s in China alone! That is incredible. Apple only sold 4 million 4S's on the first weekend of its rollout last year, and now China--all by itself--is selling half as many as the entire 4S rollout? This will be a huge quarter, and they will have very solid growth next quarter.
    17 Dec 2012, 07:09 AM Reply Like
  • $502 premarket......
    17 Dec 2012, 07:32 AM Reply Like
  • and now its 509....just went positive! chopchop were you the one person in line buying 2 million phones???
    17 Dec 2012, 09:05 AM Reply Like
  • Chop, are you short aapl or you just don't like the company, or missed the boat and pray don't get in at a reasonable price?
    17 Dec 2012, 09:06 AM Reply Like
  • I own some aapl....probably at a better price than either of you. ISheep will make rich
    17 Dec 2012, 09:38 PM Reply Like
  • I started buying AAPL in Sept. 2009 in the $170 range. I know its not the $0.47 split adjusted that a lot of people claim (lol), but I am happy with the return so far. Additionally, i like to trade around my core holding to create more value, i love when the big boys whipsaw the price. i start drooling when the price drops as it has the last couple months, i start buying more...
    18 Dec 2012, 08:39 AM Reply Like
  • w/Apple now at 514, where are you now chop..?

     

    as my kids would say... "crickets..." :)

     

    not a technical analysis guy necessarily, but it seems that today's px action is very important - this would be the second hard bounce off of 505 if we get a rally here, tailwind of good news and 10/12 weeks of selling... Good stocks "oversold" on a flood of negative sentiment usu attracts buyers. Buyers attract buyers and the low 500 base built over several weeks offers nice support.

     

    btw, very interesting take on what Apple TV might be all about over at a wsj blog today:

     

    http://dthin.gs/SGK45l
    17 Dec 2012, 03:22 PM Reply Like
  • I'm profiting off of iSheep like you. Like I've said before, the only aapl product worth owning for techophiles like myself is the stock :)
    18 Dec 2012, 09:41 AM Reply Like
  • I believe it's " technophile" mr Chop. And it's rude to refer to a fellow investors as "sheep". This is a forum for discussion, not gloating.
    20 Dec 2012, 11:10 AM Reply Like
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