Analysts stand by Apple stock recommendations after recent declines

Posted:
in AAPL Investors edited January 2014
As Apple's stock has dropped more than 10 percent in recent weeks in the face of negative headlines, Wall Street analysts still remain confident in recommending investors to buy in.

Analyst Shaw Wu with Sterne Agee sought to calm investor fears on Tuesday with his latest note, which acknowledged negative stories about Apple in the news lately. He said he has been receiving a number of inquiries from investors as to whether recent issues, including a rumored-but-denied protest at a Foxconn plant in China and lens flare issues with the iPhone 5 camera, have affected demand of the iPhone 5.

"From our latest supply chain work, we have not picked up a drop-off in demand and production appears to be improving with the bottleneck moving from components (like the in-cell touchscreen) to the assembly of the iPhone 5 itself," Wu wrote.

Stock
AAPL's recent stock performance, via Yahoo Finance.


He said wait times of 3 to 4 weeks are currently being driven by "overwhelming demand" that Apple is seeing for the iPHone 5. He remains comfortable with his forecasts of 27 million iPhones sold in the September quarter, with the company on pace for a record breaking 46.5 million handsets in the December quarter.

Brian White with Topeka Capital Markets also on Tuesday noted that Apple is the "one bright spot" seen by component suppliers. White is currently on a tour of technology companies and suppliers in China and Taiwan.

White did note that the supply chain is still struggling with poor yields of both the iPhone 5 and the rumored "iPad mini." The suppliers White spoke to have not indicated that demand for the iPhone 5 has decreased since its launch last month.

He sees iPhone 5 shipments reaching between 32 million and 40 million in the December quarter. White originally forecast between 40 million and 50 million units, but apparent continuing yield issues are expected to hold back shipments through the holidays.

"Keep in mind, the iPhone 5 has only ramped in 31 countries but Apple has previously discussed a target of 100 countries by year end," White noted. "Thus the iPhone 4 and iPhone 4S are still selling in these other countries."

The latest data from iFeng found that two the two top selling smartphones during China's Golden Week holiday were the iPhone 4S and the iPhone 4. Apple's market dominance continues even with the iPhone 5 rumored to launch in mainland China in December.

Optimism surrounding Apple was expressed by both White and Wu on Tuesday as the company's stock continued its slide. As noted by CNBC, AAPL has fallen more than 10 percent from its record closing price of $702.1 on Sept. 19.
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Comments

  • Reply 1 of 52
    sricesrice Posts: 114member
    Buy AAPL CALL SPREADS. I am. :-)
  • Reply 2 of 52


    Any ideas why the stock has dropped so much? (other than press bull)

  • Reply 3 of 52


    Originally Posted by Smiles77 View Post

    Any ideas why the stock has dropped so much? (other than press bull)


     


    That would be it. You nailed it.

  • Reply 4 of 52
    ifij775ifij775 Posts: 470member
    smiles77: so you/I can buy more.
  • Reply 5 of 52
    Swiftboat veterans with nothing better to do.
  • Reply 6 of 52
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by Smiles77 View Post


    Any ideas why the stock has dropped so much? (other than press bull)



    If you look at a chart of the NASDAQ it looks almost Identical to the AAPL chart. There are a lot of worldwide economic issues but mostly EU bailout worries. AAPL does respond to negative global economic events but it always bounces back first.

  • Reply 7 of 52
    jkichlinejkichline Posts: 1,336member
    I just saw my automatic purchase go through today. Buy low!!!
  • Reply 8 of 52

    Quote:

    Originally Posted by Tallest Skil View Post


     


    That would be it. You nailed it.



     


    No it wouldn't. Don't blame something for which you don't fully understand. Apple has a ton of big (institutional) money following it and it trades in technicals more than fundamentals/rumors/press/analysts think. I too took a bunch off the table at 701. When analysts suddenly expect large stocks to double or add zeros to the upside it's time for a pullback, and that's what's happened. It will head a little lower for a bit more than head back up after earnings.  

  • Reply 9 of 52
    I want to know who exactly is engineering this stock drop. I'd love to see which firms are colluding and have the SEC start sending some of those folks to prison.
  • Reply 10 of 52
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by jkichline View Post



    I just saw my automatic purchase go through today. Buy low!!!


    I hope you got about an hour ago when it was down $14. Right now it is up.

  • Reply 11 of 52
    Expect it to drop even lower after it's revealed that the new iPad Miniature constrains Apple's profit margins.
  • Reply 12 of 52

    Quote:

    Originally Posted by SpamSandwich View Post



    I want to know who exactly is engineering this stock drop. I'd love to see which firms are colluding and have the SEC start sending some of those folks to prison.


    LOL. How long have you been investing? Grab your pitchfork and get in line, behind the commodities watchers, forex watchers, OWS....

  • Reply 13 of 52
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by iSheldon View Post



    Expect it to drop even lower after it's revealed that the new iPad Miniature constrains Apple's profit margins.


    What are Apple's margins again? I can't recall reading about that in their financials.

  • Reply 14 of 52


    Originally Posted by thataveragejoe View Post

    When analysts suddenly expect large stocks to double or add zeros to the upside it's time for a pullback, and that's what's happened.


     


    Why? Just because they're never right?

  • Reply 15 of 52


    it's not down, it's just on sale.

  • Reply 16 of 52
    mstone wrote: »
    What are Apple's margins again? I can't recall reading about that in their financials.

    You don't need to. Simply take the full sale price less the cost of the component's parts and innards. The amount of profit (excluding R&D) will be much less in a iPad Miniature because it will sell for so much less but have basically the same parts. . And definitely far less than an iPhone's. This could be Apple's biggest mistake ever.
    So wait to buy- definitely not until after the iPad Miniature is released.
  • Reply 17 of 52
    quinneyquinney Posts: 2,526member

    Quote:

    Originally Posted by SpamSandwich View Post



    I want to know who exactly is engineering this stock drop. I'd love to see which firms are colluding and have the SEC start sending some of those folks to prison.


    Spammy advocating for government regulators (funded through government tax collection) to interfere with the free market.  I love it.

  • Reply 18 of 52
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by iSheldon View Post




    Quote:

    Originally Posted by mstone View Post



    What are Apple's margins again? I can't recall reading about that in their financials.




    You don't need to. Simply take the full sale price less the cost of the component's parts and innards. The amount of profit (excluding R&D) will be much less in a iPad Miniature because it will sell for so much less but have basically the same parts. . And definitely far less than an iPhone's. This could be Apple's biggest mistake ever.

    So wait to buy- definitely not until after the iPad Miniature is released.


    By the time an Apple product is released the price is baked in. It always sells off a little on the official 'news' because old schoolers are formula traders. "Buy on rumor sell on news" but over the long term it keeps going up. The only thing about an iPad mini that could send the stock down would be a recall. Let's hope that never happens.

  • Reply 19 of 52

    Quote:

    Originally Posted by quinney View Post


    Spammy advocating for government regulators (funded through government tax collection) to interfere with the free market.  I love it.



     


    Collusion is not a free market and besides, if you think we have an actual "free market" now you are mistaken. There isn't a person in the world who could convincingly argue there is no collusion... Come on man. The price was stuck at $666 for like, a week at one point.

  • Reply 20 of 52
    quinneyquinney Posts: 2,526member

    Quote:

    Originally Posted by SpamSandwich View Post




    Quote:

    Originally Posted by quinney View Post


    Spammy advocating for government regulators (funded through government tax collection) to interfere with the free market.  I love it.



     


    Collusion is not a free market and besides, if you think we have an actual "free market" now you are mistaken.



    So would you like taxes to be increased to hire more regulators or is it that the shibboleth of a "free market" is and always has been a myth?

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