Cramer: Apple needs to beat not just consensus, but Wall Street’s highest estimates

“Wall Street is eagerly anticipating earnings results from Apple, which is scheduled to report after Tuesday’s closing bell,” Drew Sandholm reports for CNBC.

“If you ask Jim Cramer, Apple will likely report strong demand for its iPad and iPhone devices,” Sandholm reports. “Given the considerable hype surrounding the company, though, he thinks its results will really need to make a bang.”

Sandholm reports, “The “Mad Money” host said Apple needs to beat not just the consensus estimates, but the highest estimates on Wall Street, which call for $11.80 of earnings per share and roughly $41 billion in revenues.”

Read more in the full article here.

MacDailyNews Take: On January 24, 2012, Apple CFO Peter Oppenheimer gave Q212 guidance of “revenue of about $32.5 billion” and “diluted earnings per share of about $8.50.” Now Cramer wants them to beat $41 billion and $11.80?

The only way they can get Apple to “fail” is by setting batshit insane expectations.

Related articles:
5 reasons to sell your Apple stock – April 23, 2012
Mr. Cook’s Wild Ride: Options market sees big earnings move for Apple – April 23, 2012
The Mighty Fall: Five cautions for Apple stock enthusiasts – April 23, 2012
All eyes on Apple as Cupertino powerhouse reports Q212 earnings tomorrow – April 23, 2012
Remember: Apple’s quarter is 13 weeks vs. holiday quarter’s extra 14th week – April 23, 2012
Apple to webcast Q212 earnings release conference call on April 24 – April 20, 2012

38 Comments

    1. Buy January ’14 Call options instead, because AAPL stock can be subject to short-term macroeconomic pressures, and it sometimes takes a few months for the stock price growth to catch up with earnings growth… but eventually it will go up :)\

    2. C’mon MDN, quit playing fanboy. Cramer merely states the facts. In this environment that has seen companies punished (see IBM,QCOM etc.) for good earnings he is simply stating the obvious. AAPL can’t also report good numbers and expect the stock to do well. They must report excellent numbers. That’s pretty easy for anyone to comprehend. Even fanboys.

      1. … Cramer was one of those saying “AAPL is under-valued”? The (trailing) P/E was about the same and the price was heading up at the time.
        The (trailing) P/E is still suggesting the stock is a value.
        Apple has even MORE cash in its vault.
        Apple still has no significant debt.
        The iPhone and iPad are still selling well.
        The Mac line has busted into third place in the US market.
        The various “stores” are still running at a profit.
        Apple will likely beat its own “guidance” by a nice margin. Again. It will also likely beat its year-ago Quarter nicely. Again. Normally, this would lead to a dip in the price, but we’ve just HAD the associated dip, so … who knows?

  1. Its like they want aapl to fall, which I don’t understand. Let’s assume they will only make $40 a share this year. Give it a multiple of 12 and add in its $100 per share in cash. You get $580. How low do they expect it to go?

    1. $11.80? Peanuts.

      Consensus among amateur analysts (who are always more accurate than WS), is $12.76. THAT is the number Apple must beat (by any amount), to satisfy WS need for upside surprise. My estimate is $13.11, and I think that may prove conservative.

  2. Cramer is an idiot. No company, including and especially Apple, is under any obligation to meet anyone’s expectations or targets but their own.

    I’ve got extra cash in my brokerage account on standby to snap up any aapl deals I see on the Street on Wed. morning.

    1. In fairness, Cramer is not saying this expectation is correct or fair, only that Apple is being judged by these outrageous consensus estimate rather than the guidance provided by Apple.
      I have little doubt that after this two week orchestrated beat down of AAPL share price, the big houses will be gobbling up shares tomorrow.

      1. Exactly. The only objective adult comment I have seen. Thank you Spark. There are so many on this site that act like AAPL is their best friend and they have to defend it. How silly. AAPL ; it’s the biggest,richest,most powerful company around and it doesn’t need or would it ever appreciate help from fanboys. Fanboys, don’t invest in AAPL or any company if you can’t reason as an adult. All companies are attacked and manipulated if possible. It has nothing to do with you personally. It’s simply the stock market. If you don’t understand that please refrain from investing. And making silly ass comments.

        1. With all due respect to your Wall Street prowess, this is not what Wall Street is supposed to be. The market has become a joke. Sure, there have always been some manipulations taking place in backrooms, but, at least they were done by people deeply invested. The fact that bloggers can simply toss out a rumor – that they may have just made up – and then stocks can go crashing, is not a characteristic of a healthy market.

          I’ve got family members who have been invested longer than many of the MDN commenter’s grandparents have been alive (grandparents are both in their mid-90s); they survived the great crash, they have been successful at investing, and they know their shit. Yet, they want to throw up when they see the manipulation going on. Some of this stuff was, at one time, worthy of investigation. But now, according to your Wall Street manhood, if some of us are scratching our heads over this bullshit, we’re not ready to play big boy games? Sorry, but I have investments, I have a family history of investors, and I am a big boy – but I have a differing opinion than you regarding whether or not this type of manipulation and irresponsible speculation are the signs of a healthy market. I even have the fact that the market really isn’t all that healthy to back me up (Apple’s rare current success aside).

          Just because attacks and manipulation are happening at a rampant pace doesn’t make such behavior good or productive. It’s a bad life philosophy to run with lemmings headed for a cliff. Sometimes situations need to be questioned and changed. Considering the world economy at the moment, I’d say a little questioning is in order.

          1. i have no idea what you’re talking about. But you can ramble on. I neither condone nor condemn what takes place in the stock market. I simply live with it. Otherwise I would not be invested in the stock market. Sounds as though you should not be. But never twist a person’s words for your benefit.
            AAPL is down $13 pre market. I’m not happy to lose money.
            But quit acting like a fanboy. If
            you are afraid to be in the stock market get out.
            But I do not act as though it’s something personal when a a PL is underwater.

            1. GM, your condescension as always is a appreciated. Wiredzens’ point and my point in previous posts has been that Wall Street no longer seems to care about things which are important. The other day I saw a headline that was something like “Why Wall Street no longer cares about profits…”, and I thought “Since when do profits not matter? These are for profit companies right? Their financial positions matter.” On that topic, here are MY thoughts on why this selloff is stupid. Apple is or has…

              – Debt free
              – Cash rich
              – Asset rich
              – Solid supply chain management
              – Dominant market share in mobile devices
              – Fanatical consumer loyalty (yes, this matters)
              – Solid sales in the US
              – Solid sales internationally
              – Great people
              – A great retail experience
              – And perhaps most important, an innovative, risk tolerant spirit

              “Team, it turned out that Michael Dell wasn’t perfect at predicting the future. Based on today’s stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today. ”
              – Steve Jobs the first time Apple passed Dull in value.

              Wall street is filled with Michael Dells, and I’ve got a limit order in place to take advantage of any deals I see tomorrow. Why? Because as a free market capitalist, I’m a huge believer that sooner or later, the market will have no choice but to respond to the above.

            2. The difference between the “wiredzen” and “GM” point of view is the difference between the investor and the gambler.

              The question seems to be; what is the basis for the existence of Wall Street? Is it to provide needed capital and financial liquidity to business, or is it a place that facilitates betting on share prices, often based more on emotion and superstition than the actual financial performance of the company?

              Clearly, Wall Street serves both purposes. Increasingly, those who are bettors make it more difficult for those who are investors to make sound business decisions regarding their investments. Is that a good and healthy thing for our economy?

            3. Long on AAPL : It’s an opinion not condescning. You are the perfect example of a person who only sees things as you want to see them not as they are. But you are entitled to your opinion. Asshole.

  3. I am sick and tiredof this. Before was about apple couldn’t sell it, then they did it. Then they said it was luck, apple could not pull another big quarter,then apple did it quarter after quarter. When they finally couldn’t denied that apple could sell millions of units, then now they need to found something to creat FUD in investors and manipulate stock and “make apple look bad”. So best they could do is put ridiculous goals to apple, so why they do not set a 100 billion dollars goal per quarter, then apple would underperform bad and they could blame Cook and said that apple is sinking without Job. I mean WTF is going on with these people, apple is a business model to follow by any business school in the world, and yet is questioned quarter after quarter about is capabilities, and quarter after quarter apple prove it is a solid company. I am really sick and tired of all this BS.

    1. there are a lot of people – some of them so-called journalists and analysts – whose world is coming apart due to apple and they are panicking and striking out every which way in desperation. this is going to get a lot worse before it gets better.

  4. “Apple needs to beat the highest estimates…”

    Why Jim, because Apple is expected to lift all boats?

    What you’re really looking for is a misstep from Apple so that you can start barking incessantly about how Apple, being the bellwether and the barometer in a lackluster economy, is starting to unravel.

    It’s sad, but there are people, like Jim, who actually thrive on being contrary. Nothing is about the truth, it’s just about degrees of good and bad, and in capitalism, both are valued, so when you interact with one of “them” you have to be absolutely sure you keep the conversation focused on the weather.

    1. You’re right about that. It does seem as though Wall Street wants Apple to fail, but I don’t understand what there is to gain by making a successful company appear as a failure. Doing that leads to loss of investor confidence in the market, or so it would seem. It’s like saying even a good company isn’t worth investing in. Shouldn’t a financially successful company reap the rewards it deserves otherwise what’s the point of building a successful company? I wonder as time goes by is the stock market becoming more corrupt or was it always this way. It’s really frightening to think the entire stock market is run by crooks.

    2. I hate all this pressure for the stocks and doing better each time — this is BS — Rather Apple just focus on MAKING products and get over this LUMP of CRAP…

  5. The classics will never grow old.

    Jim Cramer – Stock Market Manipulation – How he did it – in his own words/ Interview by TheStreet.com, Aaron Task

    You really gotta control the market. You can’t let it drift. You get a RIM it’s really important to use a lot of your firepower to knock it down cause it’s the fulcrum of the market today…now you caan’t foment, that’s a violation…you can’t create yourself…an impression that a stock’s down…but you do it anyway cause the SEC doesn’t understand it…

    “Get people talking about it as if something is wrong with RIM,” Cramer advises. “Then you would call the (Wall Street) Journal and talk the bozo reporter on Research in Motion and you would feed that Palm has got a killer it is going to give. These are the things that you must do on a day like today. And if you are not doing it, maybe you shouldn’t be in the game.”
    [snip]
    How do you drive Apple stock down to profit from your short position–especially when the company is just about to announce it’s new IPhone?

    “Apple–it is very important to spread the rumor that both Verizon and ATT have decided they don’t like the phone,” Cramer says. “It’s a very easy one to do. You also want to spread the rumor that it’s not going to be ready for MacWorld. And this is very easy, because the people who write about Apple want that story. And you can claim that it is credible because you spoke to someone at Apple. It is an ideal short. If I were short Apple, I would be working very hard today to get that. And the way you would do that is pick up the phone and call six trading desks. And say, listen, I just got off the phone with my contact at Verizon. And he has already said–we’re a Samsung house, we are a Motorola house. There is no room for Apple. They want too much. We are not going to let them in. We are not going to let them do what they did to music. And that’s a very effective way to keep a stock down.”

    http://tinyurl.com/3dmuu4

  6. Cramer certainly doesn’t have anywhere near Wall Street’s best stock picking record (see: http://caps.fool.com/player/trackjimcramer.aspx), but the only assertion Cramer’s trying to make is his belief that the current price of $AAPL already has those upper-end Wall Street estimates priced in.

    Fortunately, he’s doing us the honor of giving us a semi-testable hypothesis: i.e. if $AAPL reports just at or below those upper-end Street estimates (for revenue, EPS, and Q3 guidance), the stock should fall. And if it exceeds on all 3 of those, it should rise. Grey area if it’s mixed, or any unexpected non-earnings announcements are made.

    I should be so lucky if politicians regularly made such testable statements.

  7. When it all comes apart, and people take to the streets, mobs are gonna go for Wall street scoundrels and help Karma get the job done. I really hoped that the new administration would have brought change, but it is still just business as usual.

  8. Everything is italic now.

    Why are you surprised the market is trying to take Apple down? These guys are truly selfish, money grabbing b#$%^rds.

    The same type of people created the credit crisis. They didn’t even pretend to stop what they were doing and are still ripping off anyone they can.

    Fact is you can’t keep a good Apple down. Eventually it will rise back to the surface.

  9. Cramer is right.

    The pro analists intentionally underestimate Apple earnings, just not as ridiculous as Apple does. If $11.80 is their highest, should be beatable. Almost all honest analysts (the non pros) are $12 plus.

    Watch the PE, and iterations thereof (ttm, forward, backing out cash per share, etc.) and Enterprise Value, all compared to past growth and growth going forward (again, the non pro analysts).

    The conclusion is irrefutable …. AAPL going to 1,000 in 24 months.

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