Analyst: Apple stock in a ‘trough period,’ but can recover

“Apple shares moved into correction territory on Monday, falling 11 percent from its recent high of $132.97 on July 2,” Reem Nasr reports for CNBC.

“BTIG analyst Walter Piecyk said Apple can shake off the dip if it can increase its earnings next year,” Nasr reports. “Piecyk said the stock has stalled mostly on concerns about whether Apple can grow off the massive December quarter that came with the launch of the iPhone 6 and 6 Plus. ‘Now we’re in the trough period before we get any early indications of how many phones they are actually going to make and what type of improvements they’re going to have in the latest iteration of the product,’ he said.”

Nasr reports, “Most iPhone users have not yet transitioned to the 6, he said, which means there is yet ‘an opportunity to grow those numbers.'”

Read more in the full article here.

MacDailyNews Take: Ah, the summer doldrums.

SEE ALSO:
Apple shares continue swoon – August 3, 2015

19 Comments

    1. mmmmmmmm he claims it will go up. So it’s manipulating the stock if he offers an honest opinion? If he said it was going to go down further would that be manipulating the stock? If he said the stock would stay at this level for the future would that be manipulating the stock? Sounds to me like you’re underwater in AAPL. That’s your fault, not his. It’s your money, do some research. If you know that AAPL is as you say “manipulated”, then you should never invest in it. Right? There are thousands of stocks out there. Quit complaining about one particular stock. Try GOOGL,DIS,V etc.. Plenty of good companies out there to invest in. But beware!!! They go up, they go down sometimes. It’s the stock market.

    2. Winski, I don’t think the “anal-ysts” are manipulating the stock on purpose as much as failing to correct +- for BUN when generating PLUM trajectories, BUTR predictions, or BACN graphs.

      You wonder how they even graduated from business school!

  1. We have ~1 month or so before the new iPhones are released. Good time to drive the stock down so positions can be made.
    It will be interesting how low this will go. Maybe $110. That will make a nice profit once the brokers start getting their clients to buy back in.

    1. [once the brokers start getting their clients to buy back in.]

      They’ve already started. Look at today’s volume (>70 million shares) and compare that to last weeks daily average (37 Million shares). WS is buying everything offered at less than $120. In 6 months today’s sellers are going to regret their decisions very much.

  2. Things assuredly can and will change eventually in time given the chance, appropriate input, market forces, consumer behavior, global economics, any anything else.

  3. Day traders need stock price movement to play their economically pointless sell-buy games. So regardless of the fundamentals traders playing ‘guess up or down’ games will cause the stock price to oscillate.

    The sooner they bring in a Torbin tax on trades held for less than 90 days the better.

  4. During FY2014 Apple sold 170 MM iPhones. These are the primary group that will be upgrading to the iPhone “6D”. Any sales growth beyond that number will come from 3 groups: First time cell phone buyers (~3% of total sales), First time smartphone buyers (~15% of total sales), and switchers from other platforms (Android, Windows Mobile, Blackberry).

    A 2 year upgrade cycle is critical to understanding smartphone sales. It does not matter whether the customer bought under contract or paid cash, the motivations to upgrade on a 2 year cycles are the same.

    #1. Battery life. Two years of recharging a lithium ion battery have shortened its original capacity by an average of 37%. A reduction in battery capacity of that degree makes it near impossible to make it through the day on a single charge.

    #2. New features/functionality. The iPhone “6S” will have 2 major functionality improvements over the iPhone 5S. They are: larger screen sizes and Apple Pay. Further, iPhone “6S” will have several improvements that will enhance the user experience: improvements in processor and OS improvements that will extend battery life and improve display quality and refresh rate.

    #3. Replace brokenm/damaged units.

    On a 2 year upgrade cycle iPhone has grown, on average, >51%. However, the switcher rate is accelerating raidly. Extending that growth rate through fiscal 2016 has Apple conservatively selling >275 MM iPhones. That represents a YoY growth rate of ~20%.

    Ignoring continued growth in Mac and Apple Watch sales, that is more than enough to justify higher AAPL valuations

    [I am not concerned about declining iPad unit sales as I see that bottoming. Further, the decline in iPad sales is largely (IMO) attributable by cannibalization from Macbook Airs and large screen iPhones, that carry much higher ASPs (a very good thing)].

  5. If the analyst did not provide a buy/sell all the time, where would there market be? They have to have something to say if they are to stay relevant. Trading needs this movement, we all know the commissions that are made from buying and selling. Both the stock market and analyst need each other to pay there collective bills. Apple is one of the top stock to play with if you need clicks. What ever is said is bound to cause a movement in the stock. So, they often have a bent on reality to produce a profit in there respective fields. So, this is the reaility of Apple stock now, the past, and will be in the future. Hopefully, Apple continues to gain share, profit, and if they do not have another smash quarter after another the analyst will yet again have the same remarks- kinda like the programmer joke: Wash, rinse, and repeat.

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