“Apple Inc. was downgraded Tuesday to underperform from market perform by Morgan Keegan, which cited mounting evidence of broad weakness in consumer technology spending in both the U.S. and Europe,” Tomi Kilgore reports for Thomson Financial.
“Analyst Tavis McCourt said that upside potential in the stock if the company’s Mac business continues to outperform is outweighed by the downside risk if growth begins to slow,” Kilgore reports.
“‘We believe the company will still take share in its Mac and iPhone product lines, but we expect PC industry growth expectations to dampen Apple’s Mac growth as the year progresses,’ McCourt said in a research note. ‘Additionally, we are slightly lowering our iPod expectations given the likely economic sensitivity of this product line and creeping competitive threats,'” Kilgore reports.
Full article here.
Poor Tavis obviously couldn’t analyze his way out of a wet paper bag. The real risk here is in listening to analysts employed by second-tier regional firms who fall hook, line, and sinker for ginned up election year efforts to talk down the economy* while ignoring and/or not comprehending what’s really happening at Apple Inc.
*Which, of course, can become self-fulfilling prophesies. Still, we require proof that any weakness in consumer technology spending is actually impacting Apple negatively rather than positively. For example, perhaps any threat of “recession” will cause people to spend their technology dollars much more wisely, thereby getting themselves Macs which run all of the world’s software and also retain their value far better than run-of-the-mill PCs? There are a lot of variables in play here and McCourt is out of touch with, frankly, better analysts who cover Apple.
Of the 28 analyst firms making recommendations on Apple Inc. (AAPL) stock today, as covered by NASDAQ:
• 8 – Strong Buy
• 16 – Buy
• 3 – Hold
And only one, little ol’ Morgan Keegan, says “Underperform.”