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Rumored iPhone order cuts prompt Sterne Agee to drop Apple price target to $630

post #1 of 24
Thread Starter 
Apple is rumored to be drawing down build plans for current iPhone models ahead of product refreshes in the second half of 2013, which has prompted Sterne Agee to reduce its forecasts.

Citing checks within Apple's supply chain, analyst Shaw Wu reported in a note to investors on Friday that the reduced build plans correspond with evidence of a forthcoming "iPhone 5S," as well as a low-cost iPhone made out of "composite material casing."

Sterne Agee


Wu believes Apple will likely hit the lower end of its guidance for the current quarter. While not ideal, he said that result is better than some market watchers who expect Apple to completely miss its own guidance.

Sterne Agee has accordingly cut its price target for Apple's stock from $715 to $630. The adjustment comes after shares of AAPL have fallen nearly 40 percent from their 52-week high."The supply chain is very complex, and we obviously have multiple sources for things. Yields may vary, supplier performance may vary." - Apple CEO Tim Cook in January, cautioning against reading into supply chain data.

Wu's adjusted expectations are based on what he's heard from Apple's supply chain ? a strategy that Apple Chief Executive Tim Cook cautioned against earlier this year. Speaking during his company's quarterly earnings conference call, Cook warned investors that it's inadvisable to place much faith in such reports.

"The supply chain is very complex, and we obviously have multiple sources for things," Cook said. "Yields might vary, supplier performance might vary."

Cook admitted that certain data points that leak out of suppliers may be accurate, but even if the information is true, it's "impossible" to determine what that data actually means for Apple's business.

Of course, that hasn't stopped analysts from attempting to decipher whatever they can from Apple's Far East supply chain. And Wu is not alone in having heard rumors of order cuts made by Apple ? reports have have prompted a number of analysts to reduce their price targets for the company.
post #2 of 24

Seriously?   Isn't it kind of expected by now that they ramp down the existing model in preparation for the new model?  Hasn't Wall Street figured this out yet:

 

First Part of Year:

Samsung introduces new model.  Android sales 'win'  Fandroids hit the boards cheering Android is winning.  Apple fans point out that Apple sales are slowing because people are holding off buying the 7 month old iPhone (n) because the new iPhone (n+1) is just around the corner.

 

Second Part of Year:

iPhone (n+1) released.  iPhone sales 'win'  Appleites hit the boards declaring the supremacy of Apple.  Android fans point out that the flagship Galaxy (n) phone is only one of many choices in Android phones and people are holding off for the Galaxy (n+1) phone.

 

Rinse.  Lather.  Repeat.

post #3 of 24

And the stock is up $7 so far today.  Go figure.

post #4 of 24
I don't give a Wu what this analyst Shaw in the stock to begin with ¡
post #5 of 24
The more those bullshitters cut , the more I will buy AAPL.
post #6 of 24
Quote:
Originally Posted by AppleInsider View Post

"The supply chain is very complex, and we obviously have multiple sources for things. Yields may vary, supplier performance may very." - Apple CEO Tim Cook in January, cautioning against reading into supply chain data.
 

Tim Cook needs to work on his spelling when he is being quoted.

post #7 of 24
Quote:
Originally Posted by chadmatic View Post

Tim Cook needs to work on his spelling when he is being quoted.

You forgot the /s tag ... I assume you were joking ... 1smile.gif
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #8 of 24
Quote:
Originally Posted by crazy_mac_lover View Post

The more those bullshitters cut , the more I will buy AAPL.

Sadly, unless you're Bill Gates you'll probably run out of money before they stop.

censored

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post #9 of 24

BREAKING:

 

A pretend product that doesn't exist and for which there has never been any evidence of it existing isn't going to be made as much as we originally pretended. SELL!

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #10 of 24
Would be a good day to stomp on the competition and literally crush them. 4 for one stock split, 8% dividend payout, and a $40B buy back would do it.
post #11 of 24
Quote:
Originally Posted by Rogifan View Post

And the stock is up $7 so far today.  Go figure.

 

Heh, one analyst makes a prediction using a model that was specifically discounted during Cook's guidance and you would expect the market to react?

 

Was there a joke here that I'm missing.

post #12 of 24
Quote:
Originally Posted by TJRSV View Post

Would be a good day to stomp on the competition and literally crush them. 4 for one stock split, 8% dividend payout, and a $40B buy back would do it.

I am not sure how any of that would crush the competition. I always thought making good products is how Apple crushed the competition.
post #13 of 24

Three months ago they were supply constrained and now it's time to cut back.  It's a crazy business.  Unfortunately I think they will be right about the guidance as lower margin items exceed sales projections and higher margin items fail to meet projections.

 

Just a thought but if the dividend increase comes out next week might not be a bad time to buy some January 2014 call options.  If it's substantial it should send the share price higher, and if not it would still allow time for the new releases to move the share price later in the year.

post #14 of 24
Quote:
Originally Posted by tkell31 View Post

Three months ago they were supply constrained and now it's time to cut back.  It's a crazy business.  Unfortunately I think they will be right about the guidance as lower margin items exceed sales projections and higher margin items fail to meet projections.

 


Past supply constraints versus "drawing down build plans", the former one is not deliberate, the latter is.  But you're right, it's a crazy business.  I truly doubt the reduction in demand is so large that an outsider (i.e. not a senior Apple executive) would be able to determine that the draw down would cause AAPL to miss guidance.  There is (almost) always a reduction in demand in the Mar quarter, but that's reflected in guidance.  I say AAPL hits the upper range of guidance this Q.

post #15 of 24
Quote:
Originally Posted by Crowley View Post

Sadly, unless you're Bill Gates you'll probably run out of money before they stop.

Never mind , so long as I know what I bought Is absolutely worth and has the upward potential of 50% .
post #16 of 24
Quote:
Originally Posted by TBell View Post

I am not sure how any of that would crush the competition. I always thought making good products is how Apple crushed the competition.

Well, it would crush the competition by once and for all placing AAPL not only in a league of their own, but a "galaxy" of their own (pun intended and their is no way Samasung quality can be compared to AAPL computing/communications/graphics ecosystem)

Splitting stock 4 to 1 would make the float a whopping 3.8B shares, twice that of super diluted FB at 2B, but AAPL would still be valued at $110/share. Maintain dividend at approximately $10.60/share/year for a 9% yield and every investor in the world, institutional & retail would buy as many shares as they could.

AAPL's share price is not going any lower, period...so why not buy back $30B more of their own stock at $110/share. This would decrease the float back down to around $1.1B share outstanding and viola! Every investor and AAPL wins!

Isn't that the foundation for investing in a company in the first place...

AAPL's executive team were handed the keys to the best company ever created single handedly by SJ, the modern version of Edison/Da Vinci combined AND on steroids.

TODAY would be the perfect day to announce to the world, that yes, AAPL is and will continue to be the best company ever created!

A split and distribution as I have mentioned would see the stock go from $110 after the split to $300 in 10 minutes or less, while still proving a 3+% dividend yield.

Their aren't too many companies out there for AAPL to aquire who make the quality of product(s) AAPL require to be able to plug into the platform...AAPL is not a "maturing" company in terms of the growth of their market share, they have just begun!

So why are the AAPL so slow or lacking the personality of Mr. Jobs himself?

Do something Cook, and quit being such a DWEEB! AAPL stock tanking 40% while sitting on what's soon to be $150B in cash and all the investor complaints are just a silly side show? What an arrogant jerk!
post #17 of 24
I'm guessing Sterne Agee would cut their own target if their CEO came in with a cold one day (certainly this must mean he'll be dead in a week). This type of story is getting old really fast! No big picture here, just speculation on one or two rumors or factoids. Here's my guidance, ignore theirs!
post #18 of 24
Quote:
Originally Posted by tkell31 View Post

Three months ago they were supply constrained and now it's time to cut back.  It's a crazy business.  Unfortunately I think they will be right about the guidance as lower margin items exceed sales projections and higher margin items fail to meet projections.

Just a thought but if the dividend increase comes out next week might not be a bad time to buy some January 2014 call options.  If it's substantial it should send the share price higher, and if not it would still allow time for the new releases to move the share price later in the year.

May as well buy the stock outright here because of dividend support and potential split, as well as for the potential manipulation here which actually seems pretty obvious.

Then sell calls or puts. Buying them is expensive and success is based on "luck"...anyone who bought March calls, even two or three months ago got worked by super dooosh Einhorn, as well as the AAPL execs themselves. They have done NOTHING for product or shareholders/true AAPL fans since SJ passed, and that sucks!!!! How can every day be bad news, or no news?
post #19 of 24
"...reduced build plans correspond with evidence of a forthcoming "iPhone 5S," as well as a low-cost iPhone made out of "composite material casing"..."

I really can't understand how THIS specific information (indications of an imminent product refresh) could lead to a 12% reduction in the target price of the stock.

One would think the opposite would be true. That combining in-built momentum with a refresh/introduction of a new model would lead to increased sell-through & market share, resulting in increased net profits (yet another record-breaking quarter?) and SHOULD result in a higher stock price projection?

Perhaps I'm not alone in seeing it that way as the price closed up another 2.5% today. I guess Shaw Wu isn't one of those "market moving" doom-and-gloom analysts, eh?
post #20 of 24
Quote:
Originally Posted by chadmatic View Post

Tim Cook needs to work on his spelling when he is being quoted.

 

Quote:
Originally Posted by digitalclips View Post


You forgot the /s tag ... I assume you were joking ... 1smile.gif


Seriously? A tag is required here?

post #21 of 24
Quote:
Originally Posted by TJRSV View Post

Splitting stock 4 to 1 would make the float a whopping 3.8B shares, twice that of super diluted FB at 2B, but AAPL would still be valued at $110/share. Maintain dividend at approximately $10.60/share/year for a 9% yield and every investor in the world, institutional & retail would buy as many shares as they could.


Too aggressive, I think that a $24/share dividend pre-split is more likely.

45 2a3 300b 211 845 833
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post #22 of 24

At best, I think an increase in the dividend to $13-$15/yr is more likely. And I see no reason to split the stock. Other than the psychological effect, it means nothing to split (or reverse split) a stock. I would welcome a dividend increase to that level and I suspect many other investors would too. But we'll see in a few days/weeks.

If two people always agree, then one of them is redundant.
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If two people always agree, then one of them is redundant.
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post #23 of 24
Quote:
Originally Posted by Jag_Warrior View Post

At best, I think an increase in the dividend to $13-$15/yr is more likely. And I see no reason to split the stock. Other than the psychological effect, it means nothing to split (or reverse split) a stock. I would welcome a dividend increase to that level and I suspect many other investors would too. But we'll see in a few days/weeks.



Splitting the stock would:

1. Make Apple a candidate to add to the DOW
2. Allow more people to own it
3. Make it easier for poor people to buy option contracts (may or may not be a good thing)

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45 2a3 300b 211 845 833
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post #24 of 24

Splitting the stock, increasing the dividend, and buying back 1/2 the outstanding share may seem like a futile exercise or counterproductive activity, but it's not.  It would be hugely profitable for everyday investors and allow more people to buy the stock and receive real return on their investment.  AAPL is an extraordinary growth AND value play.  Owning a company, by definition means owning a share of products being sold and particilpating in expenses, revenues, and profits.  AAPLs integrated platform is a thing of beauty and good for at least another decade while it is integrated into vehicles and also takes over the living room/residence.  $137B in cash as soon to be $150B.  Using a significant chunk of that $$$ to buy back shares would increase the value of the corporation and increase earnings per share.  A 4-1 stock split while maintaining the current dividend payout and buying back shares would once again squash the inferior competitors.  Gone are the days of needing to be an IT expertise just to get the most out of your software (MSFT) or platforms based on linux.  True, AAPL is based on linux, but the best analogy I ever heard was that Linux is an army tank, MSFT is a station wagon, and AAPL is a porsche (personally I compare them more to BMW in terms of performance and understated elegance).

 

A split would make the options less expensive?  I don't think so.  AAPL's options are always going to be expensive and I get taken to the cleaners on them frequently.  However, the risk verses reward, at least to me, is that it's less risky to buy the options that it is to buy outright right now in terms of ROI.  That would change drastically should AAPL execute something like I mentioned above and it would tell all investors that AAPL values them greatly.
 

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