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RBC downgrades Apple to 'Underperform', slashes target to $70 - Page 2

post #41 of 56
1/16/09 at 4:07pm
Quote:
Originally Posted by shigzeo View Post

not sure why you quoted and then misspelled.

Carelessness on my part: I noticed a little later that he had spelled it as 'analyse'.
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post #42 of 56
1/16/09 at 4:29pm
Quote:
Originally Posted by shigzeo View Post

not sure why you quoted and then misspelled.

We really don't need pointless bickering about spelling, but both are correct, depending on the context, -se is British, -ze is American.
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post #43 of 56
1/16/09 at 5:22pm
We do not have to mentioned that every industries would be underperform in anyway due to the poor economy around the world except within mainland China where we can foresee 8% grow.

If Apple could successfully bring iPhone 3G or Nano may be to China, that will create a song market area there. China has spent 10 billion to promote 3G smartphone service.

How would you judge the performance of Blackburry from RIMM from Canada? Outperform, Neutral or Underperform? Or any other brand name of smartphone in the market?
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post #44 of 56
1/16/09 at 6:02pm
Quote:
Originally Posted by e1618978 View Post

By their formula, the stock should be

5.36 * 13 + 27.07 = 96.75

Precisely. Or the other way round:

(70-27.07) / 5.36 = 8

So they're actually sugesting an EPS of 8x. I don't see any indication that they're suffering more (that's what "underperform" means) than other technology companies. Plus, they're forgetting the deferred revenue. The fantastic iPhone introduction quarter alone should carry Apple through a few rough patches. Although it remains to be seen how rough they really are.

Anyway, I'm invested long-term. I don't care about predictions, just about results. The only prediction I care about is when a new Mini is coming!
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post #45 of 56
1/16/09 at 7:02pm
Quote:
Originally Posted by AppleInsider View Post

"Jobs' being sidelined for 6 months or more and unavailable day-to-day

two words:
ichat
isight

so much for 'unavailable day to day'

Quote:
Originally Posted by ouragan View Post


3- Steve Jobs was last seen in public in October 2008 which seems to correlate with no new product launches since October 2008, except for the 17 inch MacBook Pro launched at MacWorld 2009;

i'm sorry but i'm really laughing. Jobs hasn't made a public announcement because there was nothing to announce. it has been very typical to wait for Macworld after the holidays and not launch a brand new product in the holiday season. so no one with half a clue was surprised.

as for the 'seen in public'. what, did someone lock him up in his house for the past several months. of course he has been seen and has been in public. but "Steve Jobs buys groceries" would counter the whole "Steve is dying from malnutrition" BS so no one is going to publish it.

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5- Apple doesn't sell a business desktop computer and, since it switched over to Intel, doesn't have a desktop consumer or family iMac with a desktop microprocessor, opting instead to use a lower powered, mobile dual-core microprocessor for the iMac which developped into an anorexic thin computer for no reason at all;

I beg to differ there. I like in a small apartment without a lot of space for computer bits and with cats that love to eat cords. so having a single unit computer that lacks a slew of cables between a display and tower etc is perfect for me, and I bet for a lot of other folks that can't figure out how to plug in all that crap. and I'm running Final Cut Studio just peachy on my 3GHz iMac, thank you kindly

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7- iTunes is still limited to a store front, playing only what was bought on the iTunes store, especially the low quality 128 kbps .m4a music tracks sold through the iTunes store,

bunk. I can play all my ripped CDs from the pre iTunes store days just fine. and there is iTunes Plus which granted was small in the beginning due to the labels not wanting to play but now is growing. and it's all 256, DRM Free. and thank you itunes that I was able to update my library at a third the cost of buying the files all over. cause that would have been a small fortune.

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8- iTunes cannot be used to play high quality lossless audio formats like .flac, .ape and .wv because iTunes is not the general purpose media player it should be;

the 'should' is your opinion.

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9- Apple doesn't have a public hardware product roadmap for Mac and iPhone upgrades, only a secret one, which prevents companies and IT departments from getting budget approvals for buying new Macs;

it also prevents information leaking that might result in someone coming out with the same thing faster and destroying Apple's potential sales.

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12- While Tim Cook is a solid choice to replace Steve Jobs, Steve Jobs hangs on to his CEO title (and salary, stock options and other perks), while he could limit his role to President of the Board of directors, making for a clear transfer of powers and leadership;

I haven't seen Tim Cook prove your statement to be true. Perhaps the next few months will be that test. But for now and for many, he's an unknown in the current game.

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13- Unlike actor Patrick Swayze who

made the choice to go public. Steve Jobs is not bound by anything to have made that choice. Not now, not ever. so get over it folks.

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so that there is no confidence that he will ever resume his CEO and President functions at Apple;

which begs the question, just how bad a CEO has he been over the past 4-5 years. What has he failed to do. Not much compared to what he has done. So how can anyone lack the confidence that he could continue to do the job. Unless you think all the media rumors are actually based on facts and not pulled out of the writers butts.

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14- The numbing silence of the Apple Board of directors is an indication

that the Board recognized that Jobs has a right to some privacy and since his illness was not affecting his performance there was no obligation to violate that right and say anything.


Quote:
Originally Posted by bigmc6000 View Post

I think the pure ignorance of RBC here to think that Steve didn't have product refreshes already lined up and in work for the next 6 months is astounding.

tech products like computers or even cars are not thought up over night and released the next day. they take months, sometimes even years. Apple likely has the next couple of years planned out and in the works. And Jobs could have his wishlist for years after that already mapped. making it easy for the company leaders to play WWSD
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post #46 of 56
1/16/09 at 9:07pm
The whole term investment has for the longest time been a lie. Buying stock is gambling: no different then visiting the casino. This will always be the case for as long as it is legal to short the stock of a company. Allowing this is essentially allowing people to root and actively scheme for companies to fail.

Don't get me wrong. I don't think it should be wrong to gamble on a company doing poorly. It just shouldn't be allowed in the same market where people are supposedly investing. Investing implies supporting a company, not actively betting on it's demise.



Quote:
Originally Posted by obs1970 View Post

I invested in Apple in 2000, and held my shares until 2 d ago. I sold along the way, bought along the way, but 2 d ago, I needed the money and decided to leave.
I did not lose much overall, but to me this whole thing feels like gambling...
The same way you try to memorize which cards were played and likelihood of success and yada yada... Here you're trying not only to predict the company's future performance, which will be fine, but how the stock will move which is affected by feelings more than science...
I decided it is no longer worth it to participate in this charade... Maybe I just suck at it...
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post #47 of 56
1/16/09 at 9:22pm
Quote:
Originally Posted by Wiggin View Post

nths now. His taking a leave of absence now indicates that the health issues are more serious than we thought.

or not. His health issues might not have changed at all in the past few weeks. he might be taking a leave to avoid the media and to prove to the naysayers that Apple can survive for an extended period without him there holding hands every second of the day.
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post #48 of 56
1/16/09 at 11:11pm
Quote:
Originally Posted by ouragan View Post

There are many reasons for the shares of Apple to be downgraded to a price target of $70. Here are a few reasons:


1- There are no reasons, absolutely no reasons, for Apple to carry a higher valuation or higher multiple for its shares than competing companies listed on the NASDQ Stock Exchange;

2- Appple's growth is slowing down as evidenced by unofficial sales numbers for Macs and iPhones over the last 2 months;

3- Steve Jobs was last seen in public in October 2008 which seems to correlate with no new product launches since October 2008, except for the 17 inch MacBook Pro launched at MacWorld 2009;

4- The product portfolio of Apple carries outdated, one year old, technology, as evidenced by the absence of quad-core Penryn or quad-core Core i7 desktop processors in both the iMac and the MacMini, and the failure to update the iMac and MacMini with new nVidia graphic chipsets;

5- Apple doesn't sell a business desktop computer and, since it switched over to Intel, doesn't have a desktop consumer or family iMac with a desktop microprocessor, opting instead to use a lower powered, mobile dual-core microprocessor for the iMac which developped into an anorexic thin computer for no reason at all;

6- The AppleTV is still a joke instead of the home media server it should be, whereas HP has just launched a Mac compatible home media server for homes with extensive media collections and multiple computers;

7- iTunes is still limited to a store front, playing only what was bought on the iTunes store, especially the low quality 128 kbps .m4a music tracks sold through the iTunes store, whereas buyers can get unprotected 320 kbps music tracks everywhere else on the internet;

8- iTunes cannot be used to play high quality lossless audio formats like .flac, .ape and .wv because iTunes is not the general purpose media player it should be;

9- Apple doesn't have a public hardware product roadmap for Mac and iPhone upgrades, only a secret one, which prevents companies and IT departments from getting budget approvals for buying new Macs;

10- Apple insists on making a fat 35% profit margin on its hardware sales while its competitors reduced their profit margins from 18% to a slim 9% like Dell to increase their market share and make more money from selling more computers;

11- Apple doesn't use the latest technology in its computers or iPhones, yet demands prices that are $300 to $500 higher than its competitors which offer the latest technology like quad-core CPUs;

12- While Tim Cook is a solid choice to replace Steve Jobs, Steve Jobs hangs on to his CEO title (and salary, stock options and other perks), while he could limit his role to President of the Board of directors, making for a clear transfer of powers and leadership;

13- Unlike actor Patrick Swayze who made public his battle against pancreas cancer through a Barbara Walters TV interview, 53 year old Steve Jobs has shrouded in secrecy his own condition and been less than candid at every turn so that there is no confidence that he will ever resume his CEO and President functions at Apple;

14- The numbing silence of the Apple Board of directors is an indication of how serious the health condition of CEO Steve Jobs is, for otherwise the Board would have provided investors with regular updates on Steve Jobs' health without fear of class action lawsuits for misleading investors;

15- While Tim Cook is a solid choice to replace Steve Jobs, he would appear to be too much like Steve Jobs, insisting on 35% profit margins while blocking the use of the latest technology in Apple computers and iPhones as a cost saving, and profit increasing, measure.

16- Apple was considered to be a speculative stock by hedge fund managers who bought hundreds of millions of shares and counted on continued double digit 35% returns based on higher than average selling prices for Macs and iPhones and higher than average sales growth from quarter to quarter, two conditions that Apple can no longer meet in a recession where higher priced Macs stay on store shelves.


The Intel Core i7 quad-core desktop microprocessor was officially introduced on November 17, 2008. See:

Intel unleashes Core i7, beats itself @ http://www.tgdaily.com/content/view/40213/135/

Core i7 PCs launch with prices from $1250 to $13,000 @ http://www.tgdaily.com/content/view/40227/135/


The Core 2 Quad Q6600 65 nm desktop CPU has been available for $266 since November 2007, and $224 since April 20, 2008. See:

- Intel to cut 65 nm quad-core processor prices for 45 nm @ http://www.tgdaily.com/content/view/36136/139/

- Intel drops second quad-core CPU into the mainstream @ http://www.tgdaily.com/content/view/37038/135/

- Have quad-core processors arrived in the mainstream? @ http://www.tgdaily.com/content/view/36548/135/

- Intel adds cheap dual-core, quad-core @ http://www.tgdaily.com/content/view/39135/135/



That's a very good list of things that Apple could do better. However, there is only one point (16- Apple was considered to be a speculative stock by hedge fund managers) can explain why Apple should drop. Against Apple's speculative value, Apple has a fanatical fanbase (including a lot of their staff - would will thake 20% less to work for their favorite company), and $15B of cash to innovate themselves out of the downturn.

Oh, you can say that Steve is sick, and Apple is Steve, but I don't buy it. Steve hasn't left Apple in the hands of a softdrink marketeer (like when Apple went downhill last time), he has left Cook in charge, with Phil and Johnny backing him up. That's a helluva difference. Also, Apples big competitors (HP, Dell. and Microsoft) are no longer quite so well led. The EEE-PC is a new threat, but I still think Apple can be very competitive.

Like I said, it's a good analysis of Apple's ongoing problems, but none of them explain a sudden drop in value. A short term market panic over Steve leaving could trigger a short term fall in Apple, but in a year or two people will realize that Apple is still able to innovate its way to the top of the market.
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post #49 of 56
1/17/09 at 2:16am
Not so long ago, analysts valued AAPL at the equivalent of less than $8.00 per share. They even suggested AAPL may close down.

It wasn't that long ago.

Edit: Moral being, why listen to analysts talk about a company that they don't understand? For a long time, analysts said the iPod was a foolish piece of junk and the Mac OS X would never amount to anything. They really did say that, and for quite a while until Apple's PR image "broke positive" in about 2004-2005.
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post #50 of 56
1/17/09 at 6:36am
This is so stupid. What good does it do anyone to downgrade the stock? If anyone has worked in high-tech before they know how things work. Apple has things in its production pipeline already that Jobs has signed off on. Jobs being available part-time is more than plenty for Apple right now.

The company is doing well, innovating, and growing. RBC should fire this analyst.
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post #51 of 56
1/17/09 at 2:39pm
I have been invested in Apple for several years now and have done exceedingly well, all things considered. What I have found is that there is a desire, for whatever reason, to think the demise of this company is imminent and as such there is a tendency to leap off the band wagon first and ask questions later.

This company has been so different than most other companies that it's as if its success is being treated as something too good to be true and hence not to be trusted.

I can recall, for instance, that many were thinking that the iPod was just a faddish fluke and as soon as that device's popularity waned, that would be the end of Apple. All the while, I stayed the course because I had faith in Mr. Jobs and his great marketing instincts, the Cube aside. More importantly, I could see that Apple has come to adopt a winning formula which I summarize as, they bring products to market that they have thought through from the perspective of the end user. Rather than throw in more features and race to drop price to the lowest imaginable level, they made an iPod that just works and ties in to an eco-system that makes owning the thing a pleasure. They have developed an operating system that is elegant and relatively bug-free. They not only think of what can be done, they consider why it should be done in terms of how it enhances the lives of their customers.

This approach will survive the departure of Steve Jobs, whether or not that has already happened.

Analyst downgrades are insignificant for the long-term investor. They impact on the price for usually less than a week. They maybe linger a little beyond that point if nothing comes along to refocus the market's attention. We're days away from the annual report so this downgrade will be forgotten long before the coming week is over.

I am confident that Apple will weather the current economic storm. The company is flush with cash, has a large stable of popular products and, as others have pointed out, no doubt has some attractive products ready to unleash on the market in the year ahead. Once it becomes obvious that this company's cash holdings will continue to grow even in these tough economic times and that innovation and market leadership will continue, with or without Mr. Jobs, the stock will climb to well over $100 again. The ride will be rough on the way there, to be sure, but AAPL has been one of the most volatile stocks out there for quite some time. I don't know why 2009 should be any different.
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post #52 of 56
1/18/09 at 8:30am
Quote:
Originally Posted by joe in miami View Post

... Add to that $28 billion in the bank.

Cash represents about $30/share. You have to take current share price minus cash and you get a forward p/e ratio of about 8 times earnings. This is a ridiculously CHEAP valuation for a growth stock.

...

This is a very important point that many analysts don't seem to grasp.

Quote:
Originally Posted by foobar View Post

....
Plus, they're forgetting the deferred revenue. The fantastic iPhone introduction quarter alone should carry Apple through a few rough patches. Although it remains to be seen how rough they really are.
...

Another point some analysts don't seem to grasp.

I can't predict what the market will do, but AAPL has been hit harder than most tech stocks for no real apparent reason. The next quarterly report should be very revealing, although no matter if it is good, guidence will probably be down again and the stock may dive down some more.

At $70 I will shift some funds into AAPL. If, as some posters elsewhere have suggested, AAPL approaches $50/share, I will mortgage my house and move everyhting I own into AAPL. The last tiime AAPL approached the value of their cash and cash equimalents it went from ~$13/share, split twice and increased to ~$200/share.
just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
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just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
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post #53 of 56
1/18/09 at 10:03am
  • e1618978
  • will burn in the Fiery Pit of Hell.
Guidance won't be as bad as people are thinking- Apple has 0.21 deferred earnings for each of the next seven quarters just from last quarter. If apple sells another 4 million iPhones this quarter being reported Wednesday, that will add 0.12 to each of the next seven.

So 2nd quarter will have 0.33 in deferred earnings. I expect 2.30 earnings, 3.35 non-gaap, and guidance of 1.30, because 2nd quarter earnings will probably be about 1.62 and they will sandbag by 20% on their prediction.

I got the 1.62 figure by adding 1.07 (last years number) + 0.33 (deferred earnings) + 0.12 (4 million iphones 2nd quarter).
45 2a3 300b 211 845 833
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45 2a3 300b 211 845 833
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post #54 of 56
1/18/09 at 8:39pm
Quote:
Originally Posted by rickag View Post

This is a very important point that many analysts don't seem to grasp.

Another point some analysts don't seem to grasp.

I can't predict what the market will do, but AAPL has been hit harder than most tech stocks for no real apparent reason. The next quarterly report should be very revealing, although no matter if it is good, guidence will probably be down again and the stock may dive down some more.

At $70 I will shift some funds into AAPL. If, as some posters elsewhere have suggested, AAPL approaches $50/share, I will mortgage my house and move everyhting I own into AAPL. The last tiime AAPL approached the value of their cash and cash equimalents it went from ~$13/share, split twice and increased to ~$200/share.

Investing like this with borrowed money is a bad idea. The same goes with putting all your money into one investment. Analyst's stupid statements aren't cancelled out by stupid acts.
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post #55 of 56
1/19/09 at 1:34am
Quote:
Originally Posted by aaarrrgggh View Post

Windows 7 is due out by late summer, and it might not completely suck.

It won't. It's still definitely Windows, but it doesn't completely suck. The taskbar/Dock love-child (DockBar?) is the first significant advance in that area since the NeXT/Mac OS X 10.0 Dock so many years ago.

Has MS poached Mac OS developers the same way Jon Rubinstein poached iPhone developers, or has MS just managed to get lucky?
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post #56 of 56
1/4/13 at 11:47pm

Reading this in 2013, boy were they wrong.

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