Analysts see opportunity in Apple’s sell-off

“While many investors may now think Apple Inc. is rotten to the core, Wall Street is trying to rally support for the once high-flying stock,” Rex Crum reports for MarketWatch.

MacDailyNews Take: Replace “many” with “idiotic” in the sentence above.

Crum continues, “Such was apparent Wednesday, as most of the analysts covering Apple (AAPL) renewed their buy calls on the stock, which has now shed more than a third of its value since Christmas and is trading well below the Street’s lowest price targets.”

“Richard Gardner of Citigroup said that ‘this dramatic decline fully discounts a recession and we would be buyers on weakness’ in a note Wednesday,” Crum reports.

“More than 80% of the analysts covering the stock rate the shares as a buy, according to data from Thomson Financial,” Crum reports.

“However, some are resetting their expectations for the shares. Several analysts trimmed their price targets, lowering the Street median target price from $215 to $210. Current targets range from a low of $150 to a high of $250, according to Thomson data,” Crum reports.

“At its current share price, Apple trades about 25 to 26 times estimated earnings for the next four quarters… about 35% below its average P/E ratio of 40.5 over the last five years, according to Thomson data,” Crum reports.

“Bear Stearns analyst Andrew Neff said that the breadth of Apple’s current and anticipated product offerings puts the company in a better position this year than in 2007,” Crum reports. “Neff has an outperform rating on Apple’s stock; he trimmed his price target on the shares to $220 a share from $233 and called the day’s weakness a opportunity for investors. ‘Apple is on the cusp of multiple product cycles,’ Neff commented. ‘We’re actually more comfortable on Apple’s drivers due to iPhone shipping, accelerating Mac momentum and digital video, where video rentals [are] just starting.'”

Full article here.


  1. While many are freaking at supposed weakness, or uncertainty, in the iPod and iPhone market, the Mac sector is going to continue to boom. With laptop sales now poised to make up the largest sector of the total market, Apple is perfectly positioned. MacBooks, of all flavors, are some of the most attractive offerings available and they are going to clean up…

    I’m buying!

  2. If Apple had a bigger presence in the enterprise world, this huge stock drop wouldn’t be happening. Microsoft is not plunging that much for instance.

    Apple needs to expand its brand into the corporate world and also outside of the US.

  3. MSFT doesn’t move much in either direction, though tomorrow will be interesting since everyone is expecting huge numbers from Vista. If tomorrow is a positive day for stocks and MS shows good numbers and a strong outlook…

    I’m not holding my breath, but I’m sure the universe is just that malignant that it would do that to me.

  4. Okay, so they predicted 0.94 for the next quarter, while the street was expecting 1.07-1.09. Here’s the problem with the thinking on Wall Street:

    1. If in April they hit 1.09 as expected, the street would sell off, because they didn’t beat the street, only meeting expectations.

    2. If in April they hit 0.94 matching the lowered expectations of 0.94, they will still probably sell off, even though yoy they are still growing in double digits. Why? Because they didn’t beat expectations.

    My prediction: They will hit 1.07 – 1.09 beating the 0.94 estimates. The reason for lowballing the number is probably due to the fact that they could not see beating the original 1.09 that the analysts were predicting.

    I don’t consider myself an Apple Fanboy, but this puppy is so oversold that there is nothing left to do but set up positions for April’s Shorts Bloodbath.


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