“A selloff in Apple Inc. shares is overdone, with investors fretting too much about iPhone unit sales and ignoring the potential of its growing services business, according to Morgan Stanley, which affirmed its overweight rating and $253 price target on the stock (average analyst PT $231),” Ryan Vlastelica reports for Bloomberg.
“Apple has dropped about 16 percent since early November, including in each of the five past sessions, largely on concerns that its flagship iPhone line is seeing weaker demand; a number of Apple suppliers have recently cut forecasts, while Apple itself said it would stop disclosing unit sales,” Vlastelica reports. “Morgan Stanley described the pullback as an overreaction and recommended buying the stock on the “unit-driven pullback” as Apple’s services business and stock buyback program will drive future earnings.”
“‘The selloff “suggests investors remain narrowly focused on units, despite the increasing value of Apple Services,’ it wrote to clients. ‘As the smartphone market matures, Services takes the growth baton from Devices which ultimately results in more stable growth and higher margins at Apple,'” Vlastelica reports. “‘News flow around units is creating volatility and a buying opportunity while the investor base is still in the process of transitioning away from units,’ the report read.”
Read more in the full article here.
MacDailyNews Take: Duh.
We hereby nominate the roughly $185 billion lopped off Apple’s market value since earnings being characterized as “overdone” for Understatement of the Year. That Apple pie was burnt to a crisp in a furnace fueled by irrationality laced with stupidity.
Did you buy on the “dip?” 🙂
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