“Last week, Apple lost more than 7.20%. Credit Suisse issued a negative note regarding supply checks, and a lot of panic ensued regarding iPhone sales during the company’s fiscal 2016 period,” Bill Maurer writes for Seeking Alpha.
“With dozens of analysts covering the stock, not everyone is going to say something positive all the time. About a year ago, we saw a similar note out of Pac Crest, believing iPhone growth had peaked and demand had been pulled forward. Apple continued strong iPhone growth throughout the year, with management discussing conversion rates continuing to rise,” Maurer writes. “Don’t forget, Credit Suisse reiterated an Outperform rating and $140 price target with this “negative” note, and that implies nearly 25% upside from Friday’s closing price.”
MacDailyNews Take: It’s amazing that scams can spook/fool mom and pop investors so easily. If you can be spooked/fooled so easily, you shouldn’t be investing in the stock market.
“I still believe there is a massive upgrade opportunity, which management continues to detail. Also, I do think the launch of a 4-inch phone sometime during the spring of 2016 will provide a late fiscal year boost to iPhone sales. I also believe that we’ll see strong growth in markets like India, where Apple is looking to substantially boost sales,” Maurer writes. “Even in a worst case scenario, I don’t see fiscal year unit sales of the smartphone dipping below 225 million, compared to the 231.2 million seen in fiscal 2015.”
“Apple shares lost more than 7% in the past week, primarily thanks to one negative analyst note,” Maurer writes. “We’ve seen this story before, and a number of other analysts came out and defended Apple. I don’t think we’ll see as weak of a year for Apple as some expect, primarily in the case of the iPhone and its ASPs. In the end, I see Apple reporting another record year, which I believe will ultimately send shares of the company back towards their all-time highs.”
Read more in the full article here.
MacDailyNews Take: As per that Credit Suisse note:
This is a commission-generating note issued by the analyst so as to provide the brokers at Credit Suisse a reason to call their clients to sell/add/buy shares of Apple as the case may be. It’s called an “actionable” research report in the business. Don’t forget it’s year end bonus time on Wall Street now and the heads of research and the heads of retail and institutional sales (heads of the broker force) are pushing their analysts hard to make these “actionable” calls.
The calls from the brokers to their clients would be something along the following lines:
• To a client that is already long the broker would say, “our analyst just found out some information not yet out on the Street and he says shares will remain weak for weeks and quarters and you should sell yours hares in Apple and buy XYZ instead.”
• To a client that has no position in Apple, the broker would say, “our analyst just made a great call on Apple and the shares are down around $3 per share and I know you have wanted to buy Apple and here is your opportunity. He still has an Outperform on the stock with a $140 price target.” — Jay Somaney, Forbes, November 10, 2015
Apple lower after Credit Suisse notes substantial supply-chain cuts – November 10, 2015