Apple nightmare scenario finally priced in; a great set-up for April 23rd earnings report

“This is likely the point where investors have finally made their peace with Apple smartphone margins coming down sharply over the next 12 months – while the volumes disappoint simultaneously,” Tero Kuittinen writes for Forbes. “As AAPL breaks to $411, several nightmare scenarios have been priced in. Wall Street expectations for spring quarter iPhone volume have been drifting below 30 M for months. After a rash of recent negative brokerage notes, the number is now probably at 27 M and moving lower.”

“Even as Wall Street has come to grip with a notably weak iPhone volume performance for this spring, margin expectations have also hit a new bottom,” Kuittinen writes. “Over the past couple of weeks, investors have been witnessing a steady stream of news about major price cuts and aggressive promotional campaigns in emerging markets like Brazil and India.”

Kuittinen writes, “Many brokerage firms that loved Apple one year ago are now capitulating in terror of being too bullish just before Apple issues spring guidance. The naked fear of former Apple bulls is exactly what we need just before the earnings come out. This is a real train wreck from the sentiment angle – and that looks like a great set-up for the Apple report on April 23. We face a rare situation where both volume and margin expectations of several product categories have come down substantially. Apple only needs to deliver one positive surprise – such as iPad volume for March quarter or revenue guidance for spring – and we are likely to see a robust rebound after the quarterly report.”

Read more in the full article here.

Related article:
Apple to webcast Q213 earnings release conference call on April 23rd – April 3, 2013

32 Comments

  1. Apple was overpriced at $700 and $600 and $500.

    The stock ran from below $400 to over $700 on blind speculation and the bandwagon effect. Now it has returned to earth.

    Note to Tim Cook, many of us are waiting for the long overdue Mac Pro. It had better be good. Damn good.

      1. My only paycheck comes from the healthcare industry which employs me in a licensed profession.

        My opinion regarding Apple stock is my own and the price has returned to a reasonable range after a fevered run up that had no reason behind it.

          1. That statement does not address the assessment of price. The issue at hand is what is a fair price for Apple. The market says it is far less than $700.

            If you think it is cheap, buy some.

            1. ‘The market’ also said AAPL was worth $700 just seven short months ago. Was ‘the market’ wrong then, or is ‘the market’ wrong now? If the stock price truly reflects the value, then what has changed so profoundly between last fall and now to make the stock worth almost half what it was?

            2. You assume, by your tone, that the $250 run up last year was justified. Rather than assuming that the $300 drop since last September is appropriate. Clearly the stock was overbought as even analysts couldn’t justify the huge run-up in August and September in particular. Just as analysts can’t account for the huge drop lately. Thus the true value of Apple, on paper at least, should be somewhere between $700 and today’s price. But in reality, it’s worth what you pay for it. There were no complainers last August and September as the stock shot straight up. Right? Funny how they all come out of the woodwork when it drops like a rock though. Then suddenly it’s a conspiracy. But last summer’s run-up was justified! It’

  2. Really. I am sure that Apple will have many ignored “positive” surprises. However, if they can surprise with the resignation of a few of the board and maybe a CEO position, that is good for 10% to 25% pop that night! I have been “patiently” looking forward to that helpful news release.

    1. Considering the outright ABUSE and MANIPULATION being shat out of Wall Street onto Apple, I’d hoard my cash and buy back AT LEAST 51% of the company and tell the TechTards to kindly STFU.

      To all the ‘Apple Bears’: Not once have I ever read a word justifying the DESPERATE MAD DASH to sell off AAPL that you have instigated. Cattle will be cattle. Parasites will be parasites.

      Meanwhile: Apple (versus AAPL) continues on its path of technology leadership and brilliant invention. Anyone who bothers to research their facts can figure this out. The dolts in this situation are the SHEEPLE who think the analcysts are anything better than future roadkill rats. It’s a very old story. I’m enjoying the show…

  3. Who’s going to be the first to say “Apple has reached a bottom”? How many times have I heard that in the last six months. What’s the deepest mine shaft in the world? I’m sure Apple hasn’t reached that depth just yet. I still get the feeling that the worst has yet to come. Another few months of this and Apple will be at $350. Apple will be shaking hands with Amazon and the P/E ratio will be solidly in the 8s.

    1. What makes you think it will take 3 months. The way its acting today, could be two days. I’m long and its painful. I’m hoping today is the blow off needed to turn this sucker, but if it clsoes near the low, I see more downside tomorrow. Market nervousness with terrorist BS is not helping,

  4. Apple will be hit again even if the earnings beat. This drop isn’t about fundamentals. They should do whatever they have to do to split this stock 10 for 1 and begin aggressive buy backs. At this point i have to believe that Apple doesn’t care about the drop and they may even love it. We keep waiting for something big to happen and its just not happening. It may never happen. I have thrown up my hands at this point.

  5. As someone who works as a trader, apple is definitely not fully priced in. You can find more info about trading on my blog, but generally speaking apple is in a downtrend–there has been no buying commitment. Since thats true, why would you want to buy it? Let a stock prove to you its worth owning if you want to own it. Apple has severely underperformed the indices this year. As a trader i can say that, once a trend starts it can continue for far longer then anyone thinks. So in the meanwhile, steer clear. Next stop $360.

    1. Well…. Apple has underperformed yes. I mean, this is the chicken and the efg to me so I think it’s kinda amusing when inread stuff like that. It has underperformed because people have sold it. If people didn’t sell it it would not underperform. I don’t know. Just find these things funny or. People sell the stock in drives and then blame it for underperforming… Sigh.. Seems like cause and effect to me. Of course, investors don’t act as one but one the whole. This conversation about Apple underperforming is just stupid. I mean. Everyone can’t stand on the side lines and hope someone else buys it so they can get a stupid signal to buy themselves… Someone has to step in first.

  6. The problem is just that the market is discounting what ever it wants. Even if Apple deliver good earnings the market will probably bid up the stock at first but soon start to look to the next earnings report and worry again. The market wants to worry about Apple now so it does not matter what Apple will do because the market will look past that so it can focus on the negatives again. That is what I see.

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