The vast majority of broker advisory analyst, as well as big consultants have a negative view of Apple going into earnings on July 23rd. Zacks, Jefferies, Oppenheimer and Susquehanna have all downgraded Apple in June, while BMO Capital markets stands alone, seeing a brighter future for the iMaker.
The average price targets of analysts over the past couple months is $504.56, but the way they speak in notes to their customers, you would expect a much lower number.
While it is true that on average, analysts have a buy rating on Apple, they certainly are not sticking their collective necks out to make that known. And what is Apple’s response? A Feel-good ad, called Our Signature, that extols the Apple mission and values. Apple refuses to acknowledge the analyst’s criticism.
With earnings on July 23rd, no one is expecting Apple to announce any products or unveil any surprise numbers, in fact the whisper numbers are starting to degrade, with a general consensus that earnings will decline by over 20 percent, to $7.32.
So, Apple stock seems to have found a bottom of $385 per share back in April, after shedding over 40 percent of it’s value since reaching a high of $705 back in September of 2012. After hitting bottom, the stock started to rise right up to the WWDC event, where most analysts were expecting an answer from Apple in the form of new product announcements, specifically new iPhone models. But all they got were product refreshes, an unbelievable cool Mac Pro…which went largely unnoticed, and iOS 7.
Since WWDC, the stock has revisited those lows. And it would seem that sentiment is eroding. With earnings only a few weeks away, it is likely the stock will rise again, as investors are hoping that Apple might initiate the stock buyback program they announced at last earnings, and also the expectations that Apple will report half-way decent numbers. But even with these lowered expectations, should Apple miss by even a little, we should expect another big selloff.
Is that a bad thing? Or will a price in the mid $300 range attract a whole new crop of buyers? Or, will investors abandon the stock for other big players like Google (GOOG) or Amazon (AMZN)?
I think it’s much ado about nothing, that Apple is still king of the hill, they have the ecosystem, they have over 500 million user accounts with credit cards, and new products are on the way, with a very high likelihood we will see new product lines emerging. At the same time, Samsung is experiencing the heavy weight of its bloated and fragmented product line, and will be unable to compete with Apple if it continues to spend tens of billions on shady advertising.
So, I am patient, and have full confidence that Apple will come through, and quite frankly can’t wait to buy a new mac Pro and whatever else they come up with, hopefully a retina iPad mini. How about you?
So, what do you think?
