“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.”
For example, perhaps any threat of “recession” will cause people to spend their technology dollars much more wisely,
Wherein lies the problem, MDN.
Many of Apple’s products are luxuries. You don’t need an iPhone to physically survive.
As people get hit by the double-whammy of stagnant/falling incomes AND rising life-critial expenses (food, fuel, the ARM that just reset), fewer dollars make it into the tech dollar basket. Hence fewer dollars make it to Apple…
Apple will survive this, no question (versus bottom-feeders like Dell). However Apple will take their lumps with everyone else. Even the best products are harder to sell when there’s less marketplace money to buy them with.
MW: income. How does MDN do that??
Stay away from AAPL for now… if anything buy some cheap puts… and if it goes green then you can use that to fund actual stock purchase.
If you are holding AAPL. then buy some puts as insurance with an $10 out strike.
just a couple suggestions. i still use Apple stuff, the stock, like the rest of the market is ‘messed up’.
I’m always amused at the ‘conservative’ cry that the liberals are out to ruin the economy or business or jobs or …
Just look at the data, it’s not hard to find: For the last 80 years, every Republican president (except Reagan, but only during his second term) has presided over overall job loss, not creation. For the last 50 years, personal income growth during Republican presidents has always been less than during Democratic presidents — massively so for the poor, but even markedly for the wealthy that the Republicans try to <strike>protect</strike>, er, incentivize.
@ Mr Perspective
I humbly suggest that do a little rereading of your history books: LBJ decidedly cannot claim the credit for *starting* the Vietnam war.
Morgan Keegan is a firm full of stupid hillbillies from Memphis. Stick to what you know…pluckin’ chickens or sloppn’ hogs, or whatever it is you hicks do…and one more thing…go to hell.