Bear Stearns downgrades Apple to ‘outperform’ based on valuation

“Apple Computer’s shares were downgraded Thursday by Bear Stearns as the stock has risen sharply for the year, pushing it past the firm’s year-end price target,” August Cole and Michael Paige report for CBS.MarketWatch. “Analyst Andrew Neff lowered his rating on shares of the Cupertino, Calif.-based maker of sleekly designed computers and popular iPod digital music players to ‘peer perform’ from ‘outperform.’ Neff said he is ‘encouraged with Apple’s execution, growth potential from music and strong balance sheet,’ but added that he doesn’t see ‘compelling valuation upside even if we look out to next year… Our view is that the valuation already reflects multiple product catalysts and potential for strong December quarter results, given Apple’s seasonal strength in consumer and leverage from several synchronized product cycles,’ Neff said.”

Full article here.

11 Comments

  1. I hope Mac fans don’t see this downgrade as a bad thing for Apple and jump all over the analysts. From a stock analyst’s point of view, all it means is that the stock is no longer expected to earn more than its price might indicate, and is not as attractive for short-term investors ie, speculators. Apple’s stock has been doing very well so far this year, and its earnings are now more in keeping with its share price, which is actually good news for long-term investors, who tend to prefer more stable outlooks.

  2. It’s an analyst. Hopefully most investors understand that an analyst downgrade is indicative of nothing more significant than the analyst’s clients’ desire to purchase shares at a lower price.

  3. AnalYst�s don�t know $hit.

    My AAPL portfolio gets bigger and bigger.
    I wait for 50$ per share and dividend and I know that AAPL will outperform that. There will be split within two years.

    I bought nice piece of Apple (see the logo ” width=”19″ height=”19″ alt=”smile” style=”border:0;” /> )
    when AAPL was 12$-15$. I am more than happy ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    Apple Rocks*! (*add your favorite genre here)

  4. I will introduce a new name for the PCANAL YST�s

    It is:
    Crash Test (No USE) Dummy�s
    There you Go MDN…
    CTD it is next time ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    Or Exess Weight
    EW

  5. Apple stock appears to be aggressively price right now (~37 times earnings last I heard), so it makes sense to curtail investors expectations for short-term gains. Keep in mind that the stock price should reflect both negative and positive expectations for the computer sector in general and Apple in particular. So iPod sales and iTMS expansion and sales of new iMac G5 are supposedly reflected in the price as well as restricted availability of G5 CPUs, slips in the planned G5 development cycle, insufficient availability of hitachi HDDs for iPods, etc.

    The fun part of market timing is guessing whether or not all of those factors are accurately represented. The unknowns are investor psychology and unanticipated world events.

    I sold my AAPL at $29 a few months ago and it recently went to $35+, so that tells you what my opinion is worth.

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