Citi initiates coverage of Apple stock with 'buy' rating, $675 target
Citi Research began covering Apple stock on Monday, and kicked things off with a note to investors projecting a $675 target price with a recommendation to buy.
Citi's price target implies an expected return of about 20 percent from AAPL stock. The firm noted that shares of Apple slid 28 percent on a "correction" that began on Sept. 21, which put it in line with past corrections in its own history, as well as those of its peers.
Year-over-year growth at Apple is expected to stabilize in the first half of 2013, which Citi believes would set the company's stock on course for the $675 price target.
But that price is also 11 percent below the consensus price target for Apple on Wall Street. That's because Citi believes that the risks for Apple "are increasingly coming into focus."
"We assert that Apple's share of the smartphone market is at risk from low-end smartphones and competition from other ecosystems," they wrote. "We see upside from tablets, but this negatively impacts (gross margins)."
Rather than have a lead analyst assigned to Apple, as most other investment firms currently do, Citi has opted to take a "unique team approach" in its Apple coverage. That strategy involves semiconductor analyst Glen Yeung, software analyst Walter Pritchard, and hardware analyst Jim Suva.
"This reflects Apple's broad impact to the technology supply chain and allows us to uniquely follow the company from several industry angles," Citi explained in a note to investors on Monday.
Citi's price target implies an expected return of about 20 percent from AAPL stock. The firm noted that shares of Apple slid 28 percent on a "correction" that began on Sept. 21, which put it in line with past corrections in its own history, as well as those of its peers.
Year-over-year growth at Apple is expected to stabilize in the first half of 2013, which Citi believes would set the company's stock on course for the $675 price target.
But that price is also 11 percent below the consensus price target for Apple on Wall Street. That's because Citi believes that the risks for Apple "are increasingly coming into focus."
"We assert that Apple's share of the smartphone market is at risk from low-end smartphones and competition from other ecosystems," they wrote. "We see upside from tablets, but this negatively impacts (gross margins)."
Rather than have a lead analyst assigned to Apple, as most other investment firms currently do, Citi has opted to take a "unique team approach" in its Apple coverage. That strategy involves semiconductor analyst Glen Yeung, software analyst Walter Pritchard, and hardware analyst Jim Suva.
"This reflects Apple's broad impact to the technology supply chain and allows us to uniquely follow the company from several industry angles," Citi explained in a note to investors on Monday.
Comments
Nope. Apple is doomed.
You think they study anything ... really?
They should consider adding a customer-satisfaction-and-brand-loyalty analyst to their team, if they hope to ever understand and predict the success of Apple's products.
And here's one from Yahoo's daily ticker: [url=http://finance.yahoo.com/blogs/daily-ticker/apple-could-fall-below-500-share-barry-ritholtz-135257198.html]How Apple Could Fall Below $500[/url]
How pathetic that people get paid to produce page clicks more than accurate information. :rolleyes:
Originally Posted by Rogifan
Haha, and here's a headline in Marketwatch this morning (as AAPL is up $13 so far today): Apple drawing cooler view from Wall Street
And here's one from Yahoo's daily ticker: How Apple Could Fall Below $500
How pathetic that people get paid to produce page clicks more than accurate information.
Needs to be illegal to screw with finances that have so much weight.
Well that's Citi they'll OVER anal-ize ( no mistake in spelling)
They'll UÑDER value and they'll get it wrong 3x over
As they already are. Is this A Citi Manáge a twa????
675 is a lot more realistic than the $1000 predictions of a month ago.
Quote:
Originally Posted by BUSHMAN4
3 guys to screw in a lightbulb????
Well that's Citi they'll OVER anal-ize ( no mistake in spelling)
I see what you did there. Veeery tricky! Thanks for pointing it out or I'm sure most would have been confused at your novel and brilliant word play.
I still have hopes though ... :smokey:
Headlines are written to grab eyes. AI does this constantly. The Yahoo story though paint a reasonable picture for an investor: If you own a stock that is up 50% yoy and you cut 1/3 of your portfolio, you have effectively re-balanced to avoid being over-weight in a single stock. This is good advice. It also does not mean that the stock is expected to drop; it means that you are being greedy if you don't take some off the table.
It is important for people to paint reasonable expectations for Apple; that leads to steady growth. When you look at earnings forecasts for the December quarter, they are clearly out of line with what is happening on the street. Mac sales are going to be awful-- maybe even under 4MM units-- but the quarter overall looks quite promising!
It sure would be fun, but I would be much more comfortable with it hitting in 24-36 months.
Quote:
Originally Posted by thataveragejoe
675 is a lot more realistic than the $1000 predictions of a month ago.
Depends on the time frame doesn't it? They're looking a lot closer in than some forecasts.
Quote:
Originally Posted by Rogifan
Seriously. On a day where Apple stock is up almost 3%, and coming off the previous week which was very good, Marketwatch runs a story about Wall Street cooling towards Apple.
I don't understand what you find strange about that. There's no crime in being wrong, is there? Or when Apple stock goes up, do you think the only appropriate thing to do is to hold ones opinion if it goes against the grain?
You realize this is a market, right? Where for every purchase, someone has to sell? Disagreement is what makes a market. Trust me, when you look around and everyone agrees about a certain stock, you'd damned well better do the opposite because that's where the stock is going next.
Originally Posted by cameronj
Disagreement is what makes a market. Trust me, when you look around and everyone agrees about a certain stock, you'd damned well better do the opposite because that's where the stock is going next.
When every analyst "disagrees" with a raise in stock price while Apple continues to outperform every other company, regardless of size, there's something wrong.
Quote:
Originally Posted by Tallest Skil
Needs to be illegal to screw with finances that have so much weight.
I think you over-estimate how far published opinions can actually push a stock. It's important to note that they are stated as opinions. You can always disagree with them. It seems like your personal concern is that too many of these guys agree with each other over a short time span, thus the suggestions of collusion, or is that incorrect?
Quote:
Originally Posted by Tallest Skil
When every analyst "disagrees" with a raise in stock price while Apple continues to outperform every other company, regardless of size, there's something wrong.
Well gains in stock price typically reflect growth numbers. How are the other companies you mentioned doing in the stock market right now?
Quote:
Originally Posted by Tallest Skil
When every analyst "disagrees" with a raise in stock price while Apple continues to outperform every other company, regardless of size, there's something wrong.
Really now? Find me an analyst that doesn't have a price target above the current price, and who doesn't have a buy on the stock. You're clueless (shocker) if you really think that ANY analyst out there is predicting Apple stock to fall.