“Help me make sense of this, because when it comes to Apple and Wall Street analysts, conventional wisdom seems to be in short supply, and losing interest in company fundamentals seems to take a back seat only to the loss of analytical fundamentals by some of the experts,” Jim Goldman writes for CNBC.
“Last week, it was Morgan Stanley’s Katie Huberty who took her target down to $95 a share just as Apple seemed to be gaining some sense of momentum by finally topping $100 a share. Never mind Huberty’s forecast-challenged expectations for Apple last quarter which came in woefully short of reality: Her call last week torpedoed that momentum,” Goldman writes.
“This morning, it was Goldman Sachs’ turn at the revolving analysis door when it comes to Apple. The firm added Apple to its so-called ‘Conviction List’ on May 23 when shares were north of $180 a share. The call back then was Apple’s amazing products, and surging iPhone sales. Adding the company to the list back then suggested Apple still had a ways to go as far as share price, prospects and momentum were concerned. Flash forward 7 months later, to this morning, with the economy in shambles, and Goldman downgrades Apple shares to “neutral,” and cuts its target to $115 from $125 because of consumer concerns and a so-called ‘valuation premium.’ Huh? Are you kidding me? This stock has been cut in half since May, since that ‘Conviction List’ news, and Goldman is downgrading and lowering now? Come on,” Goldman writes.
“The fact is, if there really were conviction when it comes to Apple, analysts would see a company still selling millions of products without having to lower prices and squeeze margins in the process, even in the face of an ever-weakening economy. They’d see a company still wildly popular with a staggering $25 billion in cash in the bank and no debt. They’d see a company still investing heavily in research and development and pushing the innovation curve. They’d see a company eating its competition alive in the market place, laughing at every so-called “iPhone killer” that comes to market. They’d see a company at the crux of a new online retail outlet that’s responsible for 2 million downloads a day, whether they’re free or come with a price tag. The company’s retail stores see millions of visitors every month,” Goldman writes.
Full article – highly recommended – here.
In a nutshell: Admist the current chaos, some analysts are no longer even bothering to gloss over their B.S. with their usual veneer of warped reality. Incompetence, or something else, reigns supreme today and those who are supposed to be policing the market and protecting individual investors are AWOL.