Bank of America Merrill Lynch downgrades Apple stock to neutral on anticipated slowdowns

Posted:
in AAPL Investors edited August 2015
On Wednesday, analysts with Bank of America Merrill Lynch downgraded Apple stock to neutral and lowered a price target from $142 to $130, citing several short-term pressures on shares.




Apple is still a solid company and should deliver on its product pipeline, but its stock simply isn't providing the best balance of risk to reward, according to a memo by the analysts obtained by Bloomberg. Bank of America is anticipating shares to be hurt by a variety of factors in the immediate future, among them decelerating iPhone sales and slower gains in China.

Investors may also be more cautious because of slower gross profit growth, less dramatic earnings beats, and a diminished chance of further capital return programs like Apple's current dividends and buybacks.

Shares could also be impacted by next-generation iPhones, the analysts said. Upcoming devices -- typically referred to as the iPhone 6s and 6s Plus -- are expected to be just modest improvements over current iPhones, adding faster processors, more RAM, better cameras, and Force Touch, but nothing inherently revolutionary. The products should ship sometime this fall, most likely in late September.

Apple shares have been hit hard in recent weeks, falling from almost $133 in mid-July to $114.64 by the end of trading on Tuesday. The company has also been a drag on the Dow Jones Industrial Average for months. It set new internal records for its June-quarter fiscal results, but these were still below high Wall Street forecasts.

Despite the company's recent struggles, other investment banks have stood by Apple, including RBC Capital Markets, which earlier this week reiterated its $150 target. Analyst Amit Daryanani expects a blockbuster "iPhone 6s" launch in September, setting the way for a major fall shopping season for the Cupertino, Calif., company.
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Comments

  • Reply 1 of 41
    [quote]Investors may also be more cautious because of slower gross profit growth, less dramatic earnings beats, and a diminished chance of further capital return .[/quote]

    I can't believe these clowns are paid millions to write this crap.
  • Reply 2 of 41
    rogifanrogifan Posts: 10,669member
    It's so dumb. Nobody can explain the "panic" so they either come up with stupid stuff or go back to the same nonsense they trot out every so often. So now once again it's fears about iPhone growth and is iPhone being hurt by cheaper Android devices. One guy on CNBC this morning said Apple missed Fitbit craze. Yet before the Fitbit iPO we were getting all these media stories about people buying fitness bands and a month or two later those bands sitting in a drawer somewhere not being used. Now Fitbit is a darling and Apple missed the boat. :lol:
  • Reply 3 of 41
    ncil49ncil49 Posts: 30member
    Apple will not be able to fight a general market down and it's fall will be exaggerated. Fed raises rates this fall? Hello 70-75.
  • Reply 4 of 41
    @rogifan, nicely put.
  • Reply 5 of 41
    gatorguygatorguy Posts: 19,717member
    Did the AI author intentionally avoid mentioning that Apple's stock price has also generally rebounded within 30 days the previous 17 times this has happened? The news is not doom and gloom. On the contrary there's an expected price recovery
    http://www.usatoday.com/story/money/markets/2015/08/04/apple-stock-implosion-billions/31110665/
  • Reply 6 of 41
    drowdrow Posts: 121member

    stock analyst (noun) an individual engaged in the enterprise of convincing others to pay them fees in exchange for batcrap advice which ends up costing them even more money.  see also confidence scam.

  • Reply 7 of 41
    jungmarkjungmark Posts: 6,591member
    Where's the proof of decelerating iPhone sales in China?

    I hope those investors that listen to BOAs advice sue the analysts once Apple proves 'em wrong.
  • Reply 8 of 41
    Quote:
    Originally Posted by Gatorguy View Post

    Did the AI author intentionally avoid mentioning that Apple's stock price has also generally rebounded within 30 days the previous 17 times this has happened? The news is not doom and gloom. On the contrary there's an expected price recovery

    http://www.usatoday.com/story/money/markets/2015/08/04/apple-stock-implosion-billions/31110665/

     

    Nuts to you with your details and context /s
  • Reply 9 of 41
    I love how the articles regarding the 'S' models always downplay the model and say the improvements are minor. The only things that are not updated are the enclosure and maybe a wireless chip or 2. If force touch is added, and the already good camera is vastly improved and the new CPU is faster and more efficient and the GPUs are better and the display is better then it is a significant update. The 5S was a significant update over the 5. It brought the 64 bit chip, and Touch ID onboard paving the way for Apple Pay.
  • Reply 10 of 41
    MacProMacPro Posts: 17,835member
    gatorguy wrote: »
    Did the AI author intentionally avoid mentioning that Apple's stock price has also generally rebounded within 30 days the previous 17 times this has happened? The news is not doom and gloom. On the contrary there's an expected price recovery
    http://www.usatoday.com/story/money/markets/2015/08/04/apple-stock-implosion-billions/31110665/

    An apparently Apple supportive post from you? Ah, but I suppose you accidentally failed to notice the sting in the tail of that link /s ...

    The last part of the article Mr Google linked to is this ... "By itself, that (stock's history of bouncing back after falling below the 200-day moving average) is probably not the best reason to go out and buy the stock," according to a Bespoke report."

    Which is in fact, IMHO, BS in the case of Apple due to the unending stock manipulation it suffers at the hands of analysts. This is the very time to buy AAPL! I bet Tim did.
  • Reply 11 of 41
    dasanman69dasanman69 Posts: 12,969member
    So now one has to beat earnings in dramatic fashion every single time? What will they think of next?
  • Reply 12 of 41
    rogifanrogifan Posts: 10,669member
    jungmark wrote: »
    Where's the proof of decelerating iPhone sales in China?

    I hope those investors that listen to BOAs advice sue the analysts once Apple proves 'em wrong.

    Where's the proof from Apple? There is none because it doesn't exist. So they're going off stupid market share reports from 3rd party analyst firms.
  • Reply 13 of 41

    they probably sold a big chunk of aapl two weeks ago, and now they want to make very low entries and so they come up with BS..

  • Reply 14 of 41
    Another analyst downgrades a stock based on information everyone already knows. BTW, I am downgrading Disney since it is down 9% today. If it goes up 20% tomorrow, then I'll be sure to let you all know after the fact. Everyone subscribe to my alerts!
  • Reply 15 of 41
    "less dramatic earnings beats"

    Nice standard to have to meet each quarter.
  • Reply 16 of 41
    rogifanrogifan Posts: 10,669member
    isteelers wrote: »
    I love how the articles regarding the 'S' models always downplay the model and say the improvements are minor. The only things that are not updated are the enclosure and maybe a wireless chip or 2. If force touch is added, and the already good camera is vastly improved and the new CPU is faster and more efficient and the GPUs are better and the display is better then it is a significant update. The 5S was a significant update over the 5. It brought the 64 bit chip, and Touch ID onboard paving the way for Apple Pay.

    With Apple it's always what's next? Wall Street says ok you gave us larger screen phones now what? Ok you gave us the Watch, now what? Ok you gave us an updated ?TV, now what? Ok the car is coming, what comes after that? With other companies analysts view them as the best is still coming (They've done that with Amazon for 15 years). With Apple the view is always their best days are behind them.
  • Reply 17 of 41
    dasanman69dasanman69 Posts: 12,969member
    rogifan wrote: »
    isteelers wrote: »
    I love how the articles regarding the 'S' models always downplay the model and say the improvements are minor. The only things that are not updated are the enclosure and maybe a wireless chip or 2. If force touch is added, and the already good camera is vastly improved and the new CPU is faster and more efficient and the GPUs are better and the display is better then it is a significant update. The 5S was a significant update over the 5. It brought the 64 bit chip, and Touch ID onboard paving the way for Apple Pay.

    With Apple it's always what's next? Wall Street says ok you gave us larger screen phones now what? Ok you gave us the Watch, now what? Ok you gave us an updated ?TV, now what? Ok the car is coming, what comes after that? With other companies analysts view them as the best is still coming (They've done that with Amazon for 15 years). With Apple the view is always their best days are behind them.

    Yet they never ask ExxonMobil "you gave us gasoline, now what?" :lol:
  • Reply 18 of 41
    slurpyslurpy Posts: 5,076member

    If Apple continues to make the SAME profits they've been making, and not a penny more, they can probably buy the fucking planet in a decade. But no, they have to show more "growth" every quarter/year, both in profits, and revenue, even beyond sales. 

  • Reply 19 of 41
    sflocalsflocal Posts: 4,342member

    [email protected]!ng idiots.  What an amazing job an analyst has to literally make sh!t up and get paid lots of money for it.  At one point does anyone that regulates the market, seeing how they are gaming the system, take notice of the manipulation?

  • Reply 20 of 41
    sflagelsflagel Posts: 577member
    slurpy wrote: »
    If Apple continues to make the SAME profits they've been making, and not a penny more, they can probably buy the fucking planet in a decade. But no, they have to show more "growth" every quarter/year, both in profits, and revenue, even beyond sales. 

    What is the share value of apple on a steady profit (0 growth but steady profits)? Subtract that from the current share price and you know what value in the stock is based on growth forecast (read: fantasy, either positive or negative)
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