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Wall Street expects smooth transition from Steve Jobs to Tim Cook

post #1 of 16
Thread Starter 
Responding to the news that Steve Jobs is stepping down as Apple CEO, Wall Street analysts affirmed the company's position, predicting a relatively uneventful transition for the company and calling Tim Cook "the ideal candidate" for the role.

Apple made headlines late Wednesday when it announced that Cook would be taking over for Jobs as Chief Executive Officer. Jobs wrote in a letter to the Board of Directors and the Apple Community that the day had come when he "could no longer meet [his] duties and expectations as Apple's CEO."

The company's stock fell in after-hours trading, down $19.08 or 5.07 percent. But, Wall Street analysts quickly voiced their confidence in the company, characterizing any drop as a buying opportunity for investors.

UBS

Analyst Maynard Um with UBS remained optimistic about the news. "We expect there to be no transition issues as Cook had been running daily operations as interim-CEO," he said.

He sees Apple's longer-term strategy to be "well laid out" for Cook and the rest of the management team to continue to execute. Um also believes that Apple stock will not fall significantly because of the news, as investors have been anticipating the announcement.

"We would view any weakness as opportunity given our expectation for strong Sept and Dec quarters," he continued. In light of the transition and Apple's hefty cash balance, the analyst called for a share repurchase on the belief that it would be a "positive catalyst."

UBS maintains a Buy rating on Apple, with a 12-month $510 price target.

J.P. Morgan

Mark Moskowitz with J.P. Morgan described the Apple model as "built to last," reiterating the firm's Overweight rating and December 2012 price target of $525.

"We expect the news to create an attractive entry point for investors looking to add or build bigger positions in Apple. While the news could weigh on shares in the near term, we think the companys model is built to last, sustaining a digital way of life that other industry participants have yet to rival," he said.

According to the analyst, Jobs had a lasting impact on his company that will cement its role in the digital age. "Jobs second term as Apples CEO drove a stunning recovery and then rise to dominance by constructing a world of mobile devices and content ubiquity."

"We believe that the level of creativity and intelligence assembled throughout the management team and legion of Apple employees can sustain the Apple model and its industry leadership," he continued, adding that he does not expect "too much to change" within the company. "In our view, the far-reaching successes of the iPhone, iPad, iPod, and MacBook Air reflect the work of many, not one."

Moskowitz has a "favorable view" of Cook's ability to lead, citing his proven track record and the integral role he played in "driving the companys unprecedented revenue and earnings growth phase, limiting disruptions to the operations."

As with Um, the analyst believes Apple's stock has already been "partly discounted" in preparation of a CEO change. He cautioned that the stock will be "under pressure," but does not expect a downdraft.

Morgan Stanley

Analyst Katy Huberty sent a note to investors describing the news as a "well timed and planned leadership transition." She remains "highly confident" in the firm's near-term earnings per share estimates and continues to "rank Apple as best positioned to see upward earnings revision."

The analyst did remark that Jobs is "irreplaceable," while adding that Cook is has a "proven track record of execution." She noted that shares of Apple have generally declined 7 percent after previous health-related announcements from Jobs, before recovering 11 percent, 12 percent and 21 percent over the next 30, 60, and 90 days.

"While this transition is more permanent, it removes the overhang caused by uncertainty around the CEO transition," she added.

The firm reiterated its Overweight rating and $468 price target. She also said her bull case scenario $50 EPS estimate is "still in the cards" for calendar year 2013.



Piper Jaffray

Gene Munster said Wednesday evening that Jobs' greatest accomplishment may be Apple itself. According to the analyst, the former CEO's legacy include not only his many great inventions, but also "those people who now lead Apple and carry on his way of creating the future."

"In reality, the ethos of Steve Jobs, his vision and his work ethic, will forever drive Apple. As such, we reiterate, without hesitation, our Overweight rating on shares of Apple following the resignation of Steve Jobs and the appointment of Tim Cook as Apple's next CEO," he wrote.

Munster went on to say that Jobs' "final great act" was to groom Cook as his successor, calling Apple's new chief "the ideal candidate." He did acknowledge potential investor concerns that Cook may not be able to continue "Jobs' streak of innovation," but dismissed it by noting that "Jobs' deeply rooted vision will always guide Apple and its leaders."

"Cook is capable of running Apple, but his rare combination of extreme humility and insatiable motivation make him uniquely suited to assume Jobs' role as CEO and carry on his work with a peerless executive team," he said.

The analyst also expressed a belief that Cook will carry out a 5-year roadmap that "he and Jobs jointly established, "including several iterations of Apple's existing products as well as new categories, like an Apple Television as soon as late 2012."



For his part, Cook has been lauded as an operational genius whose behind the scenes overhaul of Apple's supply chain helped spark the company's meteoric rise. Motley Fool analyst Eric Beeker also noted in an interview with AppleInsider on Wednesday that Cook, despite lacking Jobs' visionary leadership, should do well as CEO, especially with the help of colleagues Jonathan Ive and Phil Schiller.
post #2 of 16
For people who were Mac fans during Steve's first term at Apple, how did you react to his ouster back in the 1985? Did it matter much at the time?

What was the state of Apple fanboism during the time before Steve came back to Apple? Were they defending Sculley, Spindler and Amelio's decisions the same way they defend Steve's decisions? Is there such a thing as a Cult of Sculley, Cult of Spindler, or Cult of Amelio?
post #3 of 16
Nothing has changed except for the titles of Steve and Tim. Both will keep doing what they have been doing for the last few months. Once the shock of Steve "resigning" as CEO wears out, people will realize that nothing has changed as far as day-to-day functioning of Apple goes.
post #4 of 16
I agree with the idea that Jobs and Cook have created a 5-year plan (at the very minimum)... I don't agree we'll be seeing an Apple Television.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #5 of 16
What type of panicky jackasses are dumping Apple stock on this relatively expected news that was bound to come sooner or later. Did Apple stop selling products? Did consumer demand for iPhones and iPads suddenly stop? Will consumers stop buying from Apple retail stores? Is the company going to collapse overnight? What the hell gives with these traders? I understand that Steve has stepped down, but that doesn't mean he won't be giving any input to future products. Maybe he just wanted to spend time getting that new Apple headquarters operational as soon as possible.

I'm darn sure not selling my Apple stock and I honestly can't think of a good reason why any long-term shareholder should. Does this quick dumping foretell of the hedge funds all dumping their shares tomorrow? I don't know where the heck they'd be moving their money to, because Apple is still one of the best run companies on the planet and I doubt if consumers will mind Steve stepping down as long as the products are available. Too many chicken-livered shareholders stupidly tossing Apple shares away.
post #6 of 16
Quote:
Originally Posted by Constable Odo View Post

What type of panicky jackasses are dumping Apple stock on this relatively expected news that was bound to come sooner or later. Did Apple stop selling products? Did consumer demand for iPhones and iPads suddenly stop? Will consumers stop buying from Apple retail stores? Is the company going to collapse overnight? What the hell gives with these traders? I understand that Steve has stepped down, but that doesn't mean he won't be giving any input to future products. Maybe he just wanted to spend time getting that new Apple headquarters operational as soon as possible.

I'm darn sure not selling my Apple stock and I honestly can't think of a good reason why any long-term shareholder should. Does this quick dumping foretell of the hedge funds all dumping their shares tomorrow? I don't know where the heck they'd be moving their money to, because Apple is still one of the best run companies on the planet and I doubt if consumers will mind Steve stepping down as long as the products are available. Too many chicken-livered shareholders stupidly tossing Apple shares away.

Why grumble? Just buy more shares and sell them back to the chicken littles when they realize the sky isn't falling.
post #7 of 16
Quote:
Originally Posted by Haggar View Post

For people who were Mac fans during Steve's first term at Apple, how did you react to his ouster back in the 1985? Did it matter much at the time?

What was the state of Apple fanboism during the time before Steve came back to Apple? Were they defending Sculley, Spindler and Amelio's decisions the same way they defend Steve's decisions? Is there such a thing as a Cult of Sculley, Cult of Spindler, or Cult of Amelio?

The other 3 ex-CEOs you mentioned had no following if you ask me. I first started working with Apple products, and the Mac, in 1987 when my Compugraphic phototypesetter died. Using the Mac for design, typesetting and printing was the greatest thing to ever happen to the printing industry. Although Steve was ousted from Apple by then, the Mac foundation was strong but slowly became more shaky and fragmented, especially with the OS. The 3 successive CEOs only concentrated and focused on the stock price and not the products or innovation.

I have ALWAYS believed in Apple and the Mac. When Steve stepped back into the picture, I picked up 4000 shares at the rock-bottom, dirt cheap price of $4.35 per share (split adjusted). That $17,500 investment made me a millionaire in one decade. I followed him and watched what he did with NeXT and Pixar and knew that he could give Apple vision once again and get them back on track.

If you concentrate on making great products and market them by making consumers believe that they have to own them, the share price will take care of itself. That's what set Steve apart from every other previous Apple CEO, and is what drives Apple's success.
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You talkin' to me?
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post #8 of 16
People thought that COO Bob Iger was too bland, boring, and unimaginative to ever fill Michael Eisner's shoes. But contrary to expectations, his steady hand has revitalized Disney. For one thing, he was able to smooth Disney's relationship with Pixar, leading to the acquisition that basically revived Disney's artistically obsolete, dying animation business.

Though Apple isn't in the state that Disney was at the end of Eisner's tenure, I view Tim Cook as a CEO in the mold of Iger. Apple will be fine.
post #9 of 16
Quote:
Originally Posted by tundraboy View Post

People thought that COO Bob Iger was too bland, boring, and unimaginative to ever fill Michael Eisner's shoes. But contrary to expectations, his steady hand has revitalized Disney. For one thing, he was able to smooth Disney's relationship with Pixar, leading to the acquisition that basically revived Disney's artistically obsolete, dying animation business.

Though Apple isn't in the state that Disney was at the end of Eisner's tenure, I view Tim Cook as a CEO in the mold of Iger. Apple will be fine.

Who recommended Iger for the job? Steven P. Jobs who wouldn't authorize a merger with Disney without him as CEO.
post #10 of 16
Quote:
Originally Posted by Haggar View Post

For people who were Mac fans during Steve's first term at Apple, how did you react to his ouster back in the 1985? Did it matter much at the time?

What was the state of Apple fanboism during the time before Steve came back to Apple? Were they defending Sculley, Spindler and Amelio's decisions the same way they defend Steve's decisions? Is there such a thing as a Cult of Sculley, Cult of Spindler, or Cult of Amelio?

When Steve resigned from Apple in '85 I remember thinking that Apple had just been handed over to the suits... guys who had no idea what they had, guys who would soon run out of innovative ideas to keep Apple alive. When the Performa line was unveiled and sent to retailers like Sears and Walmart I knew the end was near. There were some really sad days back in the 90s when it looked like Apple would die. Just before Steve came back to Apple it looked like Amelio, who actually seemed brighter than Spindler, would finally finish off the company but then he made this brilliant move in buying Next. The minute it was announced that Steve was coming back, every Apple fan that I knew breathed a sigh of relief. We all knew at that instant that Apple was saved. I don't think, though, that any of us imagined the extent that Steve would reinvigorate the company.

Through it all I remained a fan of Apple, never wavering and always believing that the company would find its legs... and, yes, to be honest... a lot of us did defend Sculley's, Spindler's and Amelio's actions... although I remember there was some very harsh criticism from even the fans towards the IIsi, the Performas and the foray into the Newton.
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Hmmmmmm...
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post #11 of 16
Quote:
Originally Posted by Constable Odo View Post

What type of panicky jackasses are dumping Apple stock on this relatively expected news that was bound to come sooner or later... I don't know where the heck they'd be moving their money to... Too many chicken-livered shareholders stupidly tossing Apple shares away.

Actually, these are institutional traders profiting from "bad news". Shorting the stock to profit knowing it will be going back up after this news is done.

Don't worry about. Others are making money on this news. Just hold on to your shares. The game to make real money is a bit tricky for most.
post #12 of 16
Quote:
Originally Posted by Constable Odo View Post

What type of panicky jackasses are dumping Apple stock on this relatively expected news that was bound to come sooner or later.

Likely many are selling a portion of their holdings, rather than "dumping" all of it. Others (albeit fewer) are seeing this as a buying opportunity.

Those who look at business events as "all or nothing" inflection points rarely do well with investments. OTOH, those who adjust their portfolios and reallocate portions often do well.

Hedging your bets often works well. Panicking seldom works well.
post #13 of 16
Quote:
Originally Posted by Constable Odo View Post

What type of panicky jackasses are dumping Apple stock on this relatively expected news that was bound to come sooner or later. Did Apple stop selling products? Did consumer demand for iPhones and iPads suddenly stop? Will consumers stop buying from Apple retail stores? Is the company going to collapse overnight? What the hell gives with these traders? I understand that Steve has stepped down, but that doesn't mean he won't be giving any input to future products. Maybe he just wanted to spend time getting that new Apple headquarters operational as soon as possible.

I'm darn sure not selling my Apple stock and I honestly can't think of a good reason why any long-term shareholder should. Does this quick dumping foretell of the hedge funds all dumping their shares tomorrow? I don't know where the heck they'd be moving their money to, because Apple is still one of the best run companies on the planet and I doubt if consumers will mind Steve stepping down as long as the products are available. Too many chicken-livered shareholders stupidly tossing Apple shares away.

I find this very funny....


Wednesday:
Steve Jobs no longer ceo!!!
Stock down 5%!!!
Sell Sell Sell Sell Stock!!!
Apple stock is crashing!!!

Thursday:
Apple stock going back up!!!!
Buy Buy Buy Stock!!!
Should of never sold!!!!


I'm long AAPL...
post #14 of 16
Quote:
Originally Posted by Haggar View Post

For people who were Mac fans during Steve's first term at Apple, how did you react to his ouster back in the 1985? Did it matter much at the time?

What was the state of Apple fanboism during the time before Steve came back to Apple? Were they defending Sculley, Spindler and Amelio's decisions the same way they defend Steve's decisions? Is there such a thing as a Cult of Sculley, Cult of Spindler, or Cult of Amelio?

During the late 80's and early 90's I saw Apple as a 2nd rate organization. At the same time, I saw Microsoft as 3rd rate and NeXT was first rate, even though they were largely ignored!
post #15 of 16
Quote:
Originally Posted by mdriftmeyer View Post

Who recommended Iger for the job? Steven P. Jobs who wouldn't authorize a merger with Disney without him as CEO.

I think Steve can see through these phonel balonies like Eisner. He surrounds himself with people that are not only bright, but have character and integrity.
post #16 of 16
Quote:
Originally Posted by tenzo View Post

I find this very funny....


Wednesday:
Steve Jobs no longer ceo!!!
Stock down 5%!!!
Sell Sell Sell Sell Stock!!!
Apple stock is crashing!!!

Thursday:
Apple stock going back up!!!!
Buy Buy Buy Stock!!!
Should of never sold!!!!


I'm long AAPL...

Anyone who sold the other day is not going to be able to get back in without a loss.
Hmmmmmm...
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Hmmmmmm...
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