Analyst slaps $126 price target on Apple

invisibleSHIELD case for iPad“The few lucky investors that purchased Apple at $199 following the mysterious electronic plunge in the markets Thursday made a quick 20 percent return as the stock closed above $240. One of those buyers was definitely not Edward Zabitsky. He believes the stock is going to $126 and recommends selling it short,” John Melloy reports for CNBC.

“Zabitsky, who founded his research firm Active Communications Integration in 1997 to consult the telecom industry and institutional investors, believes one of the most-favored stocks on Wall Street will decline nearly 50 percent because of competition from phones using Google’s Android software and because of a double dip in the American economy that will hit luxury brands as a consumer and government debt bubble bursts,” Melloy reports. “‘Apple is a luxury brand and in the past has correlated very well with LVMH Moet Hennessy and Christian Dior,’ said Zabitsky, who is based in Toronto, in an interview today. ‘America didn’t get rid of the bad debt, the government just took it over and consumer credit is trending down.’”

Melloy reports, “To put his $126 target in perspective, the average forecast from Wall Street analysts is $300.”

For what it’s worth, Zabitsky declined to reveal his models that get him to the $126 figure, but said it was based on much lower iPhone prices hitting margins. The increasing capabilities of phones made by HTC and the end of the AT&T exclusivity contract will be the catalyst for that plummeting profitability. When the iPhone came out it was grossly different,’ added the analyst. ‘Apple has raised the bar on what’s normal, but other phones are easily narrowing the difference because web technology is easier to program.'”

Full article here.

MacDailyNews Take: Oh, happy day! Our search for the new Laura has finally ended! Eddie, you’ve been iCal’ed with a bullet!

In the full article, Pete Najarian, co-founder of OptionsMonster.com and TradeMonster.com, said it best, “If he is right and economic circumstances cause Apple to drop to $126, we’ve got much bigger problems to worry about than that.”

40 Comments

  1. As the future and health of the American economy will be increasingly reliant on the Apples and innovators of this World (which means mainly Apple) then if it hits that price Obama or his successor will be flying off to China in their re-commissioned Airforce One Dakota to beg a rescue package while shitting themselves in fear wondering if they have enough juice to overfly the waiting Somali pirates on route.

  2. I’m guessing Kreskin of Wall Street called the great meltdown of 07-8 before it happened and called the bottom of the market. No?

    Didn’t think so- not many did.

    Someone needs to tell Junior that Apple is solid on the fundamentals, has no debt, has a full pipeline of future product and has the leanest supply chain in the business. Well I guess Kreskin didn’t know/consider all of that.

    Ladies & Gents- this effing Wall Street troll is precisely the kind of leech that is destroying American enterprise:
    1 He produces nothing of value.
    2 What he does produce is pulled out of his ass and is wrong.
    3 At the end of the day he gets paid even when he guides you wrong.

  3. He works in Toronto, ON, Canada.

    Living at The Center of the Universe does funny things to the cognitive functions.

    You wouldn’t laugh and point at a special needs child on the short bus. Please show some semblance of decorum.

  4. 1. Work hard for your money and don’t join collectives that artificially inflate the value of your work beyond all semblance of reason. You weld together cars. You don’t deserve a summer lake house. You should have studied in school like the smart kids.

    2. Stop reproducing if you’re a stupid fsck and especially if you’re married to another stupid fsck. Go rent Idiocracy instead.

    3. Eliminate most government entitlements and artificial subsidies, they’re wrecking the economy, stifling innovation, killing families, etc.

    4. Give generously to charities. They make the most effective aid to those who cannot help themselves, not government. Government is inefficient and corrupt.

    5. Get some morals/restore society’s ability to castigate. It is not okay to have babies out of wedlock. It is not okay to suck off government programs if you can provide for yourself. It is not okay to eat like a pig, get heart disease and expect your neighbor to pay your hospital bills. Etc., etc. etc.

    6. Deport illegal aliens. They are illegal. Enforce the law.

    7. Secularism and government dependency will kill America as surely as it’s killing Greece today.

  5. “the end of the AT&T;exclusivity contract will be the catalyst for that plummeting profitability.”

    WTF?!?!?!?!??!?!?!?!?!?!?!?!?!?
    I think Mr. Zabitsky forgot who he was writing about.

  6. Secularism is what made America great. The breech of the wall of separation between state and church by Bush is what started this horrible decline.

  7. There are no “investors” in AAPL. Only opportunists. As soon as they think Steve has run out of the next magical gadget, they will sell. Get ready.

    If Steve would publicly and honestly commit to the future of the Mac, that might change things. But, instead, he has declared that Apple is a “mobile device company” so what you see is what you get. And, you don’t see new Macs or new OS to run them.

  8. The problem is too much regulation. All you Left Wing pinkos want to do is give money away and regulate the free market. If you let people make billions of dollars on the stock market then all this money will trickle all the way down to the rest of us and even the homeless folks and we’ll all live in prosperity. The American Dream. It’s all about the Free Market. For a Market to be free, it must be totally unregulated.

  9. Even the foolish analysts agree that the end of the AT&T;exclusivity will enhance iPhone sales. See the experience in Canada, Europe, etc.

    @ Swing Geezer: I can’t wait to be homeless and wait for those billions to make their way down to me. A true free market is one where there is true competition without oligopolies.

  10. Master investor Peter Lynch said it well when he explained that the market value (price) of a stock will always track the company’s earnings – eventually. There is not a day-to-day correlation. But eventually, if you look at a historical chart of a stock’s price INCLUDING a chart of the stock’s earnings, the two lines will correlate. When the price dips beneath the earnings line, it creates a buying opportunity.

    (NOTE: I am NOT a technical trader. I believe in fundamentals only, not hocus-pocus of “teacup handles” and other flights of bizarre fantasy. But a chart can provide a follower of a company’s fundamentals with a useful look at how a stock performs versus its earnings.)

    With Apple, you have to also factor in that the company has no long-term debt, as well as its large amount of cash. This reduces the price to earnings ratio of Apple stock considerably.

    Unfortunately, for a day or so, idiots (or mean-spirited short sellers like this bozo, who actually appears to be both) get to unduly influence some market sentiment. But it is earnings more than anything else that establishes the value of a company’s stock. And that cannot be denied by jerks like this dork. Eventually, he will be proven wrong.

    In short, be patient. You will be vindicated, and this idiot, after there is a margin call on his short-selling activity, will be in full retreat.

    Stuff like this makes my head hurt.

  11. @swing

    Another poor satire? If not, please name ONE country in the world (in the history of the world) in which unregulated free market policy has produced a libertarian utopia.

    Greece/Portugal/Spain/Ireland are all very close to insolvent. But not all western european countries with social safety nets are in economic despair. Denmark is in no danger, Germany’s unemployment is less than 5%. Why are these countries better off than their peers? They never bought into the ridiculous free trade/free market ideology their peers adopted. And they have strong unions to to protect wages and thus create demand in their markets.

    MDN Magic Word: research

  12. Why do people pay attention to these idiots?

    Sounds to me like this moron Zabitsky, bought at the wrong time and is trying to influence the stock & recoup some losses.

    I hope that he loses his shirt.

  13. EDWARD ZABITSKY

    Another target on the Tard Radar Screen.

    Where do these nitwits come from?

    Reminder: Apple is one of the few companies to not only be profitable, but to be consistently GROWING at an historic rate during the ongoing Bush Depression. Therefore, it’s stock is going to halve. Cue the jibbering village idiot.

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