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.

Related articles:
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


  1. Well I do agree that it would be nice to have a ‘proper’ vPod and a slinky iPhone.

    Still, Zune aside, Gartner seems a little depressive.

    And he doesn’t seem to ‘get’ the Apple Stores, which are a joy to behold.

    We’re used to it… but attitude like Gartner’s still hurt, just a little…

  2. I’d just like to point out that Apple didn’t announce iPod 5G (iPod with Video) until October 12, 2005 and yet – with the nano – they managed to sell over 14 million of the damn things in last year’s holiday quarter.

    This guy is going to look like such an asshat come the middle of January.

  3. TV boy Common Sense: Actually, rumors drive the market. The axiom used on Wall Street is: “Buy on rumor, sell on news.”

    Poppycock: The analyst’s name is Shaw Wu, not Shawn Wu.

    For the rest who think Richard Gardner is seeking personal gain: analysts don’t own positions on the stocks they analyze, and they must disclose their holdings to make sure there no credence is given to such accusations.

    Go ahead, flame away.

  4. A smelly pie – meadow muffin variety — is in the air and it is headed for Gardner’s face. It is the upcoming quarterly report, due in a couple of weeks.

    This guy is a hopeless “quant,” with no sense of feel for what is happening. But as MDN put it, it creates a buying opportunity before the mob stampedes the market screaming “buy AAPL” when the quarterly results – and the pie –hit.

  5. Well considering the stock is valued rather high already, this actually makes sense. At the same time, the stock is much more solid right now – remember the sell off at the beginning of the year that sent the stock tumbling down 25-30 pts? Now it’s solidly in the 70’s, and that’s a good thing. I think we’re all looking forward to the next quarterly report – let’s hope it’s as good as our most optimistic guesses.

  6. I gotta say the 2nd most idiotic, overused statement on this forum besides “First post”….
    Here it is:

    “Looks like a buying opportunity to me!”

    Sorry if I beat the other usuals from saying it first.

  7. I agree with his assesment in the article.

    The new iPods are a good increment in usability and functionality, but there are no new products.

    All the talk of a wide screen true video pod has dampened the market.

    Come one apple. Give me a wide screen Pod or what ever your gonna call it. My 2G iPod is getting a little long in the tooth.

    magic word is ‘today’. how apt.

  8. Gardner is an idiot. Had he conducted the most basic of research, he’d have seen that orders at the Apple online store have more than tripled since Sept 12 (the Special Event).

    AAPL’s performance isn’t driven by “the next big thing”, it is driven by the markets reaction to what it offers now, and that reaction is very, very strong.

    God, I hate analysts. That’s why for the past several years I have done my own.

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