“It’s not often–like almost never–that you see a downgrade parade like the one for Apple this morning, that doesn’t follow earnings or some kind of catalyst,” Jim Goldman reports for CNBC. “But such is the case today for Apple [AAPL $111.25, -$16.99 (-13.25%)], from the likes of RBC Capital, Morgan Stanley and Barclays (though Barclays merely reinitiated with a lower price target.) Morgan Stanley took its target from $178 to $115. RBC went from $200 to $140.”
Goldman asks, “So why now, why all of a sudden and why so much pessimism around these shares?”
“Well, first things first: fundamentals be damned. I don’t think this is necessarily about what Apple itself might be doing wrong. It seems to be far more “macro” than “micro.” I spoke to one analyst this morning who says the economy is such a mess right now with so much concern about the consumer, that a year from now no one wants to look back and say ‘how could you have possibly missed that?’ Whether Apple products are still selling well or not,” Goldman writes.
“I suspect that if Apple misses its numbers in a few weeks, this analysis this morning will look pretty spot on. But if Apple blows through those expectations, and beats, these analysts can seek cover under the guise that these concerns today, mirroring the macro-economic condition, could gain a foothold at any time over the next year or so and they thought that now would be a good time to sound the alarm bell,” Goldman writes.
“Trouble is, this kind of the thing tends to become a self-fulfilling prophecy, which means this analysis–any analysis–can’t be wrong. Even if it might be,” Goldman writes. “And that’s a rough place for investors to be if they’re trying to, well, invest.”
Much more in the full article – highly recommended 0 here.