Morningstar: Apple sell-off looks overdone

“Apple’s shares have faced pressure as a variety of reports and, more important[ly], a couple of the firm’s component suppliers have suggested that inventory corrections are taking place as iPhone 6s and 6s Plus sales are not living up to the company’s estimates,” Brian Colello writes for Morningstar.

“A clear takeaway, in our view, is that strong quarterly revenue beats for the December and March quarters, which Apple has routinely generated, are probably off the table with the 6s launch,” Colello writes. “Yet we still see a scenario where iPhone unit sales are able to meet our estimates despite grim production cuts, depending on how overly optimistic Apple may have been when building for its 6s launch.”

“We still project that iPhone unit sales will be in the high-70 million range for the December quarter, which would represent modest growth from the year-ago quarter,” Colello writes. “However, iPhone unit sales for the March quarter, which would rely on Chinese New Year spending, look shakier and may in fact decline year over year (we currently model slight growth).”

“We consider Apple’s competitive position in mobile computing to be as strong as ever, yet shares around $100 are priced as if the iPhone will never grow again, which we think is possible but unlikely as we see the iOS ecosystem creating customer stickiness,” Colello writes. “We are maintaining our $140 fair value estimate for Apple and consider it one of the better investment ideas in technology.”

Read more in the full article here.

MacDailyNews Take: It’s “unlikely” that the iPhone will never grow again? Way to bravely and concisely make the clear call, Brian! “Probably.” “Possible.” “May.” “March quarter sales ‘may’ decline,’ [but] we currently model slight growth.” Gee, Brian, do you want some more bases to cover? Are you analyzing a company or running for office?

Enough with the wishy-washy, all-things-to-all-people nonsense: iPhone sales will certainly continue to grow. Anybody who suggests differently has no idea what they’re talking about.

Real world iPhone 6s adoption data contradicts Apple analysts’ so-called ‘supplier channel checks’ – January 7, 2016
Top-rated analyst: Apple’s iPhone business is healthy – January 7, 2016
Apple falls for third day as so-called ‘iPhone woes’ trim $40 billion in value – January 7, 2016
Apple stock price tumbles 3% in premarket, now trades well below $100 – January 7, 2016
Apple stock slumps near $100 amid ‘iPhone sales worries’ – January 6, 2016
Wall Street’s freak out over declining iPhone sales is overblown – January 6, 2016
Piper Jaffray: Apple’s iPhone production cut do not necessarily presage sales decline – January 6, 2016
Foxconn plans ‘rare’ holiday as iPhone output fears rattle investors – January 6, 2016
Apple to release Q116 earnings, webcast live conference call on January 26th – January 5, 2016


      1. …but you paid $100 for a stock that’s only worth $97 and tomorrow it could be worth a lot less. You could have bought a perfect stock like Amazon for $610 and doubled your money in six months. Everyone knows Amazon can’t possibly fail and Apple is surely doomed. You should realize that Jeff Bezos is the perfect CEO while Apple shareholders are demanding Tim Cook be fired. Amazon has a P/E of around 920 and investors see that as a cheap stock. Investors won’t touch Apple with a P/E of 10.7 because it’s too big of a risk. You watch which stock rebounds faster. Wall Street’s money is on Amazon.


        1. When people say Apple is in trouble because it has low marketshare I just realize they have no understanding of margins.

          When people say Amazon is in trouble because its P/E is so high I just realize they have no understanding of the value of reinvesting all profit into capital and logistical growth.

          There is more than one way to create real value.

  1. Are the gloomy announcements of some analysts honest reporting or market manipulation? Maybe the SEC should look at the trading patterns of these “analysts” is it a “form” of insider trading. Sell high, make a gloomy prediction, buy low…… Investors dream.

  2. Wall Street (Stock Market) ™ is a Ponzi Scheme. Apple is not Wall Street. Apple is not a Ponzi scheme. Betting on Apple is a sure bet. Betting in the stock market is not.

  3. I wrote this in an earlier post – Samsung’s confirmed woes support it.
    Anyone remember mp3 players? When the iPod first came out, there were a ton of mp3 players will really crappy software and poor controls. Apple’s iPod provided the first device that had great software, worked with your music library and addressed a lot of issues with inferior products. It took several years and generations but Apple came out with more models to fit every need. They started at the top and pushed the competition to the low end of the market. Eventually the shuffle stuck the knife in and killed off the competition.
    The market has forgotten that but this is exactly what Apple are doing in the phone market.

    1. Apple has been designing it’s own mobile processors for years and they’re pretty decent in terms of performance. Wall Street doesn’t give a damn about Apple’s A-series processors.

      Amazon is now selling its own brand of mobile ARM processors and Wall Street is singing Amazon’s praise for having an additional revenue stream and it should be good for another $30 a share for Amazon shareholders. That’s the difference between Apple and Amazon. No matter what Jeff Bezos does it’s considered a genius move that impresses everyone. If Tim Cook did something like that, Apple stock would drop even further.

  4. Having figured out that the drop in AAPL recently has nothing-at-all to do with Apple the company…

    Today the world is going giving a sigh of semi-relief that messed up China didn’t close its market again today and that it actually went slightly up. So what do we see??? AAPL go slightly up. Hmm.

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