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Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing...

Estimate cuts from Pac Crest's Andy Hargreaves are helping Apple (AAPL -2%) underperform. Citing weak demand for the 9.7" iPad - he thinks this is likely "a sustained trend" as demand shifts to smaller/cheaper tablets - and a demand pause ahead of a refresh, Hargreaves is cutting his FQ3 (June quarter) iPad forecast to 15M units from 18.5M. He also thinks "the high end of the smartphone market is quickly becoming saturated," and has lowered FQ2 and FQ4 revenue/EPS estimates further below consensus. Hargreaves cut Apple to Sector Perform on Jan. 16, when shares were at $503.
Comments (43)
  • Blah blah blah
    27 Mar 2013, 12:22 PM Reply Like
  • The genius who thinks NFLX is worth $225. Nuf said.
    27 Mar 2013, 12:23 PM Reply Like
  • Exactly - but he doesn't really believe NFLX is worth 225 , he just is trying to get enough of us to believe it is worth 225. Pacific Crest has always been a tech oriented house and a cheesy company. They are pump and dumpers and do horrible underwritings as a rule. Nflx has a huge advantage like LinkedIn and Salesforce and Amazon - they have no real earnings so not much can disappoint , and in a bull market that works but in a bear cycle katie bar the door. Apple will still be a 3-4 hundred dollar stock , netflix will be a 30 dollar stock. i just wish somebody would tell me when the deluge begins.
    27 Mar 2013, 12:37 PM Reply Like
  • Well said. Only time will tell what happens to aapl and these guys know nothing more than anyone else. They simply talk their position and they let a few select hedge traders know in advance of their downgrade/cut so they can load up on puts and short positions. Its a rough game and the only way you can make short term money in aapl is to wait until it is very oversold and then buy - getting out of the trade quickly with a few point profit to avoid $10 down days like today. Assuming no fundamental change on aapl, a long term buying opportunity would be in the $352 range if it ever gets there.
    However, I believe aapl will hover in the 400-484 range until they convince the street that they can still turn out a blockbuster. I was in the apple store last night. My ipad 4 was separating between the screen and the black plastic area. They exchanged it for a new one without any issue. Anytime I go into an apple store, I watch the actual sales being made as best I can.
    In the 20 minutes I was there they sold 9 ipad minis, 4 iphone 5's and one imac and thats with very few people in the store due to the holiday, I imagine.
    Aside for the Surface Pro, which I own, is there any company that is currently making products on the level of aapl in terms of ecosystem, beauty, reliability, great user experience and simplicity of operation? I know of none.
    27 Mar 2013, 12:59 PM Reply Like
  • Actually more people use Netflix than Apple. Nobody owns two Netflix accounts, but a lot of people own multiple iPads, iPad + iPhone combo, or any other worthless combination you can come up with.
    27 Mar 2013, 07:07 PM Reply Like
  • The problem with apple is that short term there is no growth and even though the management was whispering about the dividend you can only fool the street for certain amount of time only. Apple apperar to be holding the dividend annoucement for the earnings release to compensate for the bad quarter.WS figure this out and became agrresive sellers. This is very naive by Apple leadership and the stock will be go below $400 before the earnings release. Aggresive shorting the stock is the only winning strattegy.
    29 Mar 2013, 09:17 AM Reply Like
  • The best of luck in your investments !
    29 Mar 2013, 10:04 AM Reply Like
  • remember when all these people initiated buy ratings when the stock was at $650-700??


    Look what happened soon afterwards..
    27 Mar 2013, 12:34 PM Reply Like
  • I am getting so tired of the idle speculation
    27 Mar 2013, 12:36 PM Reply Like
  • Had friends buy 'smaller, cheaper tablets' and boo-hooed after because couldn't obtain needed functions and apps - so much for a bargain. Don't know why they thought they would get the same quality as the tablet I have if they were willing to downgrade and go cheaper.
    27 Mar 2013, 12:44 PM Reply Like
  • my personal favorite is when the price drops a few percent on a price target reduction to a number still 20-30% above today's price...


    let's see the following this year before reacting:
    1. Plan for 150+B in cash
    2. China mobile
    3. New product launches - what is in the pipeline?
    4. Q2-3 results
    5. Do they launch a cheap iPhone?
    27 Mar 2013, 12:46 PM Reply Like
  • Looks like Andy was still short when stock closed above 50 day MA, So he announces to the world that the 9.7" Ipad demand is weak. HMMM , OK .


    He and other shorts cover today and the turnaround in the shares moves on. Safe to add or initiate positions today.


    Long AAPL
    27 Mar 2013, 12:52 PM Reply Like
  • Two thumbs up!
    27 Mar 2013, 01:11 PM Reply Like
  • Anyone that closely follows Apple knows the iPad mini is a perfect device for many and yes it will eat into iPad sales. I have had 1 since the first day and I knew it would be a huge seller. This is a bs article that says nothing new, except the downgrade to "market perform" which can be spun in either direction. What a wimp.
    28 Mar 2013, 08:13 AM Reply Like
  • just ask around you what are customers buying. I did not hear a lot of people buying anything, no iphone , no Samsung. The market is saturated .
    Plus there is a big promotion from best buy for the iphone 5. This is a bad sign at the end of the quarter, similar to the wallmart promotion before XMAS.
    27 Mar 2013, 01:42 PM Reply Like
  • My wife just got an IPhone 5. There was a lot going on and most wanted IPhones at AT&T.
    27 Mar 2013, 03:22 PM Reply Like
  • Sorry, guys, but he's right. No matter how much you wish that AAPL would return to those golden days of yore, it's not happening. The number of people willing to pay Apple prices for tablets and smartphones is rapidly diminishing. Don't give me any bull about "elegance, form, or user experience" either. I own an iPhone and a Galaxy. The iPhone has some advantages, but the new Galaxy is a substantial competitor at a substantial discount. In these times, people really do watch their money, and the move away from iPhones will continue until Apple management realizes that $580 for a phone is no longer a single price point. Without a less expensive product, Apple will continue to be the Rolls-Royce of phones, with about the same level of market penetration as Rolls-Royce. I've owned APPL since it was in the 90's. Sold it all out last October at $650 and bought back in at $420. I have an order to sell at $445. It's rapidly approaching that mark, and I will take my profit and sit on the sidelines. If you want to ride the rocket to the ground, be my guest.
    27 Mar 2013, 01:42 PM Reply Like
  • Why didn't your sell order execute last week? AAPL crossed $445 on 3/18 and is now at about $452. It went up to $469.95 on Monday.
    27 Mar 2013, 01:53 PM Reply Like
  • you just got busted!
    27 Mar 2013, 02:34 PM Reply Like
  • "rapidly approaching that mark ($445)"


    So if I understand you, you're holding your Apple stock until it falls to $445 and then you'll sell it?


    Forgive me if I don't break any speed records following your investment advice.
    27 Mar 2013, 03:23 PM Reply Like
  • Lol. I do not get it......take $25 gain if you could have taken $50?
    27 Mar 2013, 03:26 PM Reply Like
  • I'm not quite sure what you mean by "in these times, people do really watch their money." The market is at all time highs, home prices are up and the stores and restaurants are packed in my neck of the woods.
    Just in the last two weeks I have had meetings with more billionaires than I can ever remember.
    I can assure you that they are living very, very well, buying homes for $80 million in buildings like 15 CPW in Manhattan. Was in a meeting there yesterday, walked around looking at a billion dollar art collection. Client has Gulfstreams, Range Rovers, Patek watches, 6 servants, $250 million Ferrari collection, etc, etc, The trophy wife was getting into the bentley to head over to harry Winstons to buy a few diamonds.The very wealthy do one thing very, very well and that is to get wealthier at the expense of the dumb schlubs that are out there like me!
    Cold as it may sound, it is these type of people that keep the economy going. This guy just paid $24 million for a Koons sculpture. That provides a very nice income for all that were involved in the sale. One sale generated over 2 million in sales tax revenue to the state of ny.
    My point is that if your saying that aapl will fail and samsung will win because the galaxy is less money, that could not be farther from reality. this guy buys iphones, ipads, ipods, imacs for himself, his kids, his wife, even his servants were sporting new iphone 5's. There are plenty more families like this who, with their purchases, spend more than most families in the us collectively. If aapl makes the best phone, ipads, etc in the eyes of most people, a few extra dollars spent on a better product, even a "perceived better product", is worth it to them. I think if you ask most people who makes a better product aapl or samsung, I believe most would vote in the aapl camp. Quite a bit of the media hype you hear is paid for by the hedge funds depending upon their positions. I'd take more stock in looking at what most people are carrying around or asking the "man on the street". I'm not married to any one product, I buy the best for me. I enjoy the quality of aapl over the other brands. I also enjoy the reliabilty, the ease of use, the quality of the ecosystem. I can easily communicate for "free" with others in my group of family and friends through imessage and facetime. Siri is also wonderful to have and she has become even more capable. She make it very easy to search and get answers, even order movie tickets. Her power is underated. No other company has the synthesis within their products. All that said, regardless of how many iphones, ipads etc they still sell, until aapl can release some wow product to prove to the street that they still have "it" without Jobs, the negativity on both the company and stock will continue. Sadly, for those holding aapl stock at much higher levels, thats the new reality.
    28 Mar 2013, 10:23 AM Reply Like
  • I've never seen so many people in denial. I agree with SAR2401.
    27 Mar 2013, 02:36 PM Reply Like
  • still waiting for evidence to support why aapl should not be in the $600-$700 range.
    27 Mar 2013, 04:38 PM Reply Like
  • I think we're all waiting for evidence that it should be in that range.
    27 Mar 2013, 07:10 PM Reply Like
  • Joe: Easy answer: The markets are efficient (mostly) and its priced how it should be. Just because you lost hundreds per/share does not mean it should just go back up.
    27 Mar 2013, 11:32 PM Reply Like
  • Don't expect to just go up, but it would be nice. Just saying I think upside is more likely.
    8 Apr 2013, 06:23 PM Reply Like
  • Customers are buying into the Apple eco-system. This is protected by a moat by top-of-tree software and service and buttressed by excellent hardware design. You can compete on the hardware but it is the eco-system that you cannot provide. It is not often observed but as the eco-system spreads it entices others into it not by 'leading-edge' but by the sheer numbers already within it. Grandma didn't buy an iPhone on day 1 because it was too 'new-fangled' but she will today because all her sons and daughters and grandchildren and their friends all have one. It is easier in every way for her to own one now. It's the avalanche effect when the question; ' How do I do this' is answered and taught by everyone else in the house. For 'Grandma' read the non-technically aware user - also known as the mass consumer.
    27 Mar 2013, 05:03 PM Reply Like
  • I still remember the day (quite recently) that $AAPL surpassed $GOOG and every $AAPL bull was cheering that feat.


    Hey, look: Now $GOOG is about the double of $AAPL.


    What changed so much in a mere quarter?
    27 Mar 2013, 05:06 PM Reply Like
  • One word - Sentiment
    27 Mar 2013, 05:10 PM Reply Like
  • Sentiment...and logic set in.
    27 Mar 2013, 07:11 PM Reply Like
  • GOOG's bubbles about to burst somewhat. The run up in Google is mainly a function of the sell-off in Apple, as misinformed investors assume that Apple's loss is Google's gain.
    28 Mar 2013, 03:55 AM Reply Like
  • Sentiment and future expectations changed, but whether or not the prevailing sentiment is reasonable remains to be seen. Google has had nine earnings misses in a row.
    28 Mar 2013, 01:49 PM Reply Like
  • This analyst has a concern about the 10" iPad. I got an email from a leading internet retailer offering brand new mini iPads for $40 and $55 off for the 16 and 32MB models respectively.


    If the iPad mini is such a hot seller why is it being discounted? Lower prices are coming in the tablet and smart phone market and that's not good for Apple I don't care how cheap the stock looks.
    27 Mar 2013, 05:24 PM Reply Like
  • best buy is offering the iphone 5 at a discount. Do you think they will do it if apple did not give them a break. Apple is trying at all cost to increase the iphone sales before the end of the quarter, that means they are in trouble. they should preannounce .
    27 Mar 2013, 06:22 PM Reply Like
  • Apple sales numbers are so large it is impossible to grow significantly higher. Revenue went from $33 Billion to $160 billion in four years. That's 20% effective growth for 16 years.


    Even if their numbers fall back the cash flow still supports a P/E equal to the standard S&P.


    Apple does not discount the iPhone or iPad.


    27 Mar 2013, 07:29 PM Reply Like
  • Is this about 9.7" iPad ?


    Seems we lost sight of the obvious preference Apple fans have for the Mini.


    Also, re overall: It is impossible to believe the whole Apple empire is not creating 2 products we all know are coming. The engineering is possible, so it's simply the engineering...And Apple has the best engineering and production management.
    27 Mar 2013, 08:18 PM Reply Like
  • Apple hits 600 by summer. Ignore the shorts. With the iWatch this year, Apple 4K TV on the horizon and with the pending news of a dividend hike, Apple is a steal at $452.
    28 Mar 2013, 04:16 AM Reply Like
  • Capitolalb: In my short life experience, nothing is a steal when the markets are near all time highs. Otherwise, I'd agree with you.
    28 Mar 2013, 06:07 AM Reply Like
  • I was in an AT&T store today looking at some peripherals. I asked the salesman how iPhone sales have been and he indicated that more than 80% of the phones that they sell are iPhones. Rumors of Apple's demise have been greatly overstated.
    28 Mar 2013, 06:42 AM Reply Like
  • With their cash they can do almost anything.
    Buy a China company?
    Buy Intel?
    etc. etc.
    Stock will range 400-500 easily
    28 Mar 2013, 07:48 AM Reply Like
  • Rather than buzz words like China Mobile, do the marketing surveys and see for yourself their stuff is overpriced, Then look at the revenues going forward. There is big downside in this model.
    28 Mar 2013, 08:41 AM Reply Like
  • Apple needs to invest money in south america and get production out of China asap. They have the money, just screw them commies.
    28 Mar 2013, 12:00 PM Reply Like
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