Apple shares drop in premarket trading after Citigroup downgrade

“Shares of Apple Computer Inc. fell in premarket Monday trading after a Citigroup analyst downgraded the maker of the iPod and Macintosh computer, discouraged by the lack of new products before the peak holiday season,” The Associated Press reports.

AP reports, “Richard Gardner reduced his rating to ‘Hold’ from ‘Buy,’ saying Apple is unlikely to introduce a new video iPod with a larger screen and a virtual click wheel before the peak holiday season. The new iPods announced last month appear to comprise the company’s entire holiday collection.”

“Also on the product front, Gardner said that volume availability of an Apple-branded mobile phone is unlikely until the first quarter, or early in the second quarter. This phone is also likely to see sales limited to the U.S. market during the first six to 12 months, and is going to be relatively expensive,” AP reports. “Looking ahead, Gardner predicts revenue growth to slow, from 37 percent in fiscal 2006 to 20 percent in fiscal 2007 and 12 percent in fiscal 2008.”

Full article here.
Why not just drop Apple straight to “Sell” because it’s also unlikely that Apple will introduce a Tricorder before the end of the decade and because Steve Jobs eschewed a mock turtleneck for a button-down shirt during his last keynote presentation, both of which are so damn discouraging that we can hardly keep typ…

(Gardner must have dropped the crystal ball he normally uses for growth rate predictions, run over it multiple times with a steamroller, vacuumed up the glass dust, then removed the bag and dropped it into the incinerator. Gardner’s reasoning in this report takes speciousness to a whole new level (and that’s really saying something for a Wall Street analyst). The current iPod lineup will be just fine (in fact, better than just fine) for the holidays. Apple is primed to have their best quarter in the company’s history this holiday quarter on both the Mac and the iPod fronts. (But, if this creates a decent buying opportunity near-term, we’re not complaining.) We’re saving this one from Gardner and we will definitely revisit it upon results of fiscal 2007 and 2008.)

MacDailyNews Note: Q4 06 Apple Quarterly Earnings Call is scheduled for 10/18/2006 after market close.

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Investor targets increase on Apple Computer with price target of $139 – October 02, 2006
TTS Zurich: ‘Strong Buy’ on Apple Computer with price target of $116 – October 02, 2006
Apple climbs in pre-market trading after ThinkEquity raises target price to $100 – September 25, 2006
UBS hikes Apple price target to $92, maintains ‘buy’ rating – September 07, 2006

36 Comments

  1. This is just a ruse to get the price down to creat a huge buyiing opportunity when Apple RAMPS UP with the forthcoming quarterly results due next week.

    Normal practise amongst thieves and robbers I’m afraid…

  2. Unlike the accusations made against Shawn Wu, who simply removed APPL from his focus list, this looks like a genuine effort to spur a pull-back and create a share-buying opportunity. Those of us who are long-term holders/buyers will be helped by this. The cattle–as opposed to the sheep who merely follow this recommendation and won’t be hurt–who interpret such advice negatively and sell, might stampede and will likely take some short-term profits but could miss out on long-term growth. Buyers will also be advantaged. These guys are worth paying attention to depending on your investment strategy. Because Apple is profitable, cash-rich and churning out product and generating sales, these pieces have little to do with the reality of what they will deliver and what we as consumers can buy. Apple is as tight-lipped as ever–except for iTV–and so we can expect more surprises around the corner. Speaking of around the corner, who’s going to MacWorld? I’ll be there.

  3. I bought a 5th gen iPod last year during the Christmas season – I love it. This year I am getting my wife one of the new colored nanos for Christmas (but can’t make up my mind which one). A friend of mine flipped when she found out she could afford to get shuffles for her three kids – all of whom want iPods (not some other brand). At $79 I think they will sell a TON of them. Another friend is looking to get a nano to use with the Nike running kit. All told I think Apple’s iPod line up is great: updated products, lower prices…

    There is also the really great line up of Macs (saving up to get a macbook myself)…

    Yup, I think Apple’s product line is very strong right now…

  4. What a track record for Citigroup!!!! Last time Gardner at Citigroup had anything in the nature of re-grading to say about APPLE was March 13. Apple was at around 67 and they UPGRADED to a BUY from a HOLD.

    We know that the stock immediately went down to around 52[ 28%] instead of Up during the next 3 months. Looks like they have it in exactly the wrong direction. How do these irresponsible idiots get away with this stuff? Doesn’t anyone look to see just how stupid they’ve been in the past?

  5. I don’t understand why people take buy and sell advice from people who get commissions on that same activity? Seriously, a downgrade on a stock based on the non-delivery of unannounced and/or non-existant product? Instead of actual activity of existing product. How much are these dart-throwing prognosticators/bullshit artists making? Amd how do I get a space at the trough too?

  6. What’s the matter, did Richard Gardner miss his entry point for Apple stock? What a crock. This is total manipulation and this guy needs to be investigated, at the very least he needs his head examined. MacDaily News needs to post his email address so we can all give him a piece of our minds. Check this out from RealMoney:
    “Citigroup downgraded Apple to hold from buy this morning because “EPS upside is already priced in.” At a glance, that’s a fine judgment call for the analyst to make. But then I read the report, and the analyst writes right there on the first page: “We might reconsider our Hold rating, all things equal, on a pullback below $71.” So if the stock pulls back a little more than 5% in the next few weeks, it’d be a “Buy” again?”

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