Merrill Lynch reiterates Sell rating on Apple Computer

Merrill Lynch has reiterated their Sell rating on AAPL following yesterday’s run-up, saying the current weakness in the company’s primary markets (especially education and professional) outweighs the likely benefits associated with online music sales. In addition to the weakness in Apple’s primary markets, Merrill Lynch expects operating income to be negative this year, which means that positive net income will come entirely from interest income. Merrill Lynch also says the shares remain expensive on a price/earnings (P/E) basis.

Apple shares are currently $16.17 in pre-market trading, up from $16.09 at the close of the market yesterday.


  1. I can’t believe that anyone would listen to what Merrill Lynch has to say after what they have done in the recent past. I’m so happy to see Apple-finally- take it’s well deserved place in the market as a truly innovative company.

  2. Either someone at ML has a vendetta against Apple, or they want the stock as low as possible so they can buy it up before Apple goes through the roof.

    I hate brokers.

  3. Sometimes anal-ysts can’t see the forest for the trees, or in this case, Apples in among the PC throng.

    Apple led the way in the Tech downturn – what was at first believed to be an Apple-only problem soon spread to the rest of the PC industry. It may well lead the way out of it.

  4. Funny how Steve Milunovich, the analyst at Merrill Lynch who chimed in with his negative outlook (and accompanying “Sell” reiteration) on Apple’s product pipeline, did so the day following the stock run-up. Pretty shady if you ask me. I think he’s being paid off buy someone with a short on AAPL. No kidding. Read on.

    Just to blow his cover, he is the same analyst who wrote this THE MORNING before Steve Jobs’s keynote at MacWorld SF in January:

    “Apple appears to be dealing with a thin pipeline for new products…”

    This comment, given its timing, destroys all, if any, credibility he had. That comment was his first after initiationg coverage on AAPL. His coverage was obviously very lacking. ANYONE tracking Apple, even if only for that week, would know that the company—for the past 15+ years—has held its major semi-annual trade show, where it typically announces its latest round of products and services, in early January. A more informed “analyst” would have at least waited until AFTER Steve Jobs left the stage to issue his “guidance.” Seems to me like he was unwillingly assigned to track AAPL for the firm, and had one too many Jack Daniels the night before his report was due.

    There is one positive thing to be read from his recently initiated coverage. The large majority of companies covered by equity firms are those whose stock their customers own. That Milunovich was asked to reinitiate coverage on AAPL (you know he didn’t do it out of sheer interest and/or the goodness of his heart) demonstrates that a fair amount of Merrill customers (or a few larger institutional ones) had renewed interest in buying AAPL.

    Mr. Milunovich, perhaps it would be best if you were relieved of your AAPL coverage responsibilities. You are obviously spread too thin there at Merrill and are unable to devote the appropriate amount of time it takes to effectively track the stock. If you are at all interested in the offer, give me a call. I’m graduating college next week. I need a job. Let me know.

  5. When Merrill recently posted a BUY recommendation on a stock I thought it would be fun to find out if they were in bed with the recommended company.

    Here’s their reply:

    > Dear Valued Client,
    > Thank you for your Merrill Lynch inquiry.
    > Investors should assume that Merrill Lynch is seeking or will seek
    > investment banking or other business relationships with the companies
    > that they provide an investment opinion for.
    > Please do not hesitate to contact us if you have additional comments
    > or questions. We appreciate the opportunity to assist you.
    > Sincerely,
    > Lemmon Hamilton
    > Merrill Lynch

    >> 5/2/2003 12:04:20 PM
    >> Does Merrill Lynch have any Banking Relationships with the recently >> upgraded Jack in the Box [JBX]?
    >> thanks, Stephen

    Anyone who listens to Merrill Lynch is an idiot.

  6. My portfolio is full of sweet AAPL’s. Screw the anal-lysts. They are a bunch of lazy morones who never bothered to understand Apple’s business model.
    Go AAPL

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