Analysts’ amnesia sets up a 2013 value for Apple investors

“Apple entered 2012 as a stock that simply couldn’t rise fast enough to account for its underlying earnings growth. Investors who went missing this year may get a near-identical redo in 2013,” Antoine Gara writes for TheStreet.

“Interestingly, while some tech pundits say the last twelve months were a game changer for the iPhone and iPad maker and are calling for the company’s eventual demise, Apple enters 2013 in a notably similar state as it did in last New Years Eve,” Gara writes.

Gara writes, “Those betting on Apple’s continued earnings growth will have remarkably similar arithmetic underpinning their 2013 investing strategy… Apple entered 2012 with a price-to-earnings ratio of 11.53 and it heads into 2013 at a PE of 11.69, a 1.4% rise over the course of the year. Still, Apple’s stock is up over 25% year-to-date, even after a similar sized selloff from record highs above $700 hit in mid-September.”

Read more in the full article here.


  1. 2012’s rally was just the correction for the lack of 55% growth/year in 2011 (indeed, in 2011 AAPL only saw LINEAR growth, rather than the proportional(=exponential) growth any healthy stock should have). Of course there was some overshoot (say 50 out of 705), but right now AAPL should be at 750.
    AAPL’s recent 30% loss is mainly due to analysts’ failure to recognize AAPL’s mid-012 rally as a mere correction.
    They will be proven wrong. Again.

  2. Wall Street thinks Apple should be selling around 70 million iPhones and 50 million iPads per quarter. Forget it, Apple shareholders are going to get shafted. I don’t care if Apple is doing better than every tech company in the world, but if Apple doesn’t meet analysts’ expectations, Apple’s share price is not going anywhere but down.

    I’ve already heard that this is one of the worst Christmases for retailers since 2008. That’s already clueing me to get ready for another Apple debacle quarter. Wall Street expects Apple to perform as usual in a crap economy and it’s not going to happen and Wall Street is not going to be pleased. Apple will make its usual billions of dollars from relatively high sales and Apple shareholders will get nothing but heartache as the company gets downgraded even further.

    1. Actually analysts have been lowering their expectations. So no, analysts don’t expect Apple to perform as usual. I don’t think I’ve seen the 70 million figure at any time from analysts. I would imagine that the poor retail results would also affect Apple. Why wouldn’t it? Apple is a retailer. Bad economic times affect all companies with some exceptions. Apple makes great stuff but if people don’t have enough discretionary money they can’t purchase those great products. It’s simple economics. I’d bet that Apple still did enough this quarter to satisfy the street’s numbers. But only time will tell. I don’t think that they will blow away those numbers though. I hope I’m wrong. The poor retail numbers have to knock off a little even for Apple. Third week of January will be interesting.

  3. I don’t know why most people have a problem with AAPL being undervalued. No debt and a low PE means your risk is low if you own the stock. As we all know, if the market takes a major downturn, it will trash the the high PE stocks. Also, don’t forget that profits always win in the long run.

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