Analysts: Apple selloff overblown; company better positioned than most other tech players

“Of all the tech giants who took a beating in Monday’s stock market meltdown, Apple suffered the worst, dropping 18 percent,” Brian X. Chen reports for Wired.

“What does it mean for Apple? Absolutely nothing, explains Oppenheimer & Company analyst Yair Reiner,” Chen reports. “‘I respect someone coming to the conclusion that the economy is going to turn very sour and Apple may be among the chief casualties of that,’ said Reiner, in a phone interview. ‘But I think that’s a really short-term call.'”

Chen reports, “Reiner said Apple’s stock crash isn’t going to decrease production of iPhones, MacBooks, MacBook Pros or cancel the development of a hot new product.”

Chen reports, “The only way Apple’s falling share price might have an impact is if the company needed the capital to expand or make dramatic changes, which would require raising money by offering more shares. And that isn’t likely, because Apple has upward of $20 billion in its balance sheet, and the company is still trading at 21 times its earnings for 2008, Reiner said.”

Full article here.

Katie Marsal reports for AppleInsider, “Even as stocks melted down on Monday and fears of tough recession set in, analysts at Piper Jaffray held strong to their Buy rating on shares of Apple, saying the company remains the best positioned amongst its peers to weather the economic storm. ‘We recognize investors do not see light at the end of the tunnel as market fears appear to be outweighing fundamental analysis,’ analyst Gene Munster wrote in a note to clients.”

“Munster remains confident in his outlook for the Cupertino-based company and offered a number of supporting arguments… ‘Our analysis of two months of NPD data on Mac and iPod, which has a 0.90 correlation, suggests 5 percent upside to Street numbers,'” Marsal reports.

Marsal reports, “The analyst maintained his Buy rating and $250 price target on shares of the company, as well as its place on his firm’s Alpha List. ‘We believe fears of a continued global slowdown will impact equity investments in the tech sector,’ he wrote. ‘But our thesis leads us to conclude that Apple is better positioned than other tech players to weather the storm.'”

Full article here.

22 Comments

  1. Here’s the truth about the great APPL sell-off yesterday and today’s closing price:

    Listening to only two analysts’ recommendations, some poor bastards sold this equity for $105 at day’s end. In 24 hours, the very same equity closed at $113. It’s not much (+7.98%), I supposed, but someone still bit the bullet here. (Hope it wasn’t too hard.)

  2. It’s a well run company with a clear vision of their future, $21 billion on hand with no debt, delivering goods and services in considerable demand, and trading within a glimpse of their 52 week low.

    Buy.

  3. If you believe in Apple’s strategy and products, then would be foolish to sell into this sudden market downturn. Apple is likely just temporarily being dragged down with the rest of the losers. Holding onto quality companies generally pays well in the long run.

  4. “[Munster] maintained his Buy rating and $250 price target on shares of the company”

    Now, that guy has balls of steel. He’s basically saying it will make it to $250 within ONE year. I’m expecting it will get back to at least $190 in the next 12 months, and THAT is optimistic in today’s market. But I hope Munster is right!
    Go Apple!

  5. AAPL takes a big hit. Dell and HP (the only others I “follow”) take much smaller hits. What is the cause for them all taking hits? Big credit problems across the economy. (can I see that “Big” in 144 pt font?) What this means is that there will be fewer loans out there for people – and companies – needing them. People need loans to buy cars, companies to build products. Except … Apple has $20 Billion in liquid assets. They don’t NEED to borrow money to build product. Dell and HP may need to borrow money to build PCs, but Apple can sail right along. It will be months before their productivity would be curtailed, while Dell and HP would have to slow things down almost immediately.
    I know.
    I’m preaching to the choir.
    I just bought 30 more shares. All the money I could free up. Will find a way to grab another hundred or so if the price stays low, but that’s “convoluted” and, for an old man like me, “scary”.

  6. I’m holding everything. It was weird yesterday, one of my stocks, Polaris (makers of snowmobiles, personal water craft, motorcycles-high end leisure products) actually gained a little. Lost it today but, what the heck. It was just odd a leisure product could go up.

  7. Of course it’s better positioned.

    It’s positioned better for growth than any other computer company out there. The possibilities for growth for Apple seem to be limitless.

    If the equities market were based on the ideas of the originators this might mean something.

    Instead, the stock market is basically another lottery or worse just a hight tech Las Vegas where the house (read “analysts”) always wins.

  8. I’m glad one analyst is sticking to his guns. Plus, he’s a fundamentalist, not a technician, all the better.

    I tried to buy 400shs at a limit price of a $100, yesterday, but didn’t hit. I’ll wait until next week, and rethink whether I want to buy more shs.

  9. From now on, perhaps it would be prudent to add a tag-line with any analyst mentioned: did not foresee the enormous market plunge of 2008.

    This may offer some perspective when people throw their opinions around to influence others.

    MDW “great” as in “Not so.”

  10. So Apple has 19 or 20 billion dollars of cash on hand. But that money never just sits there. I be a much happier investor if Apple announced that they haven’t invested in any of the worrisome derivative markets which have eaten Wall Street. So, Steve Jobs, are you a fan of investing your companies money in Credit Default Swaps?

  11. I’m confident that Apple will weather the financial storm. They have a huge cash reserve and their clientele typically has larger disposable income than other consumers. New products can help Apple keep the momentum going.

    Buy if it goes down to $100 again.

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