Wells Fargo cuts Apple price target as stock hovers just above $100
The price of of Apple stock has been driven lower by concerns over demand for the iPhone 6s lineup, dropping near $100 per share in early trading on Wednesday as investment firm Wells Fargo Securities cut its own outlook, predicting a short-term "road bump" before a return to growth.
Analyst Maynard Um reduced his "valuation range" for shares of AAPL to between $120 and $130 on Wednesday, down slightly from his previous range of $125 to $135. Um said he was erring "on the side of conservatism" given recent concern over iPhone 6s sales in the current March quarter.
He said those issues are not surprising to him, as iPhone sales growth tends to be softer during an "S" product cycle. But history has also shown that Apple can also find unit strength from lower end models, Um said, noting that the iPhone 4s performed well during the iPhone 5s product cycle.
And while Um said there is "potential" for iPhone sales to fall year over year in the March quarter, he doesn't believe Apple's hot selling handset has "peaked."
Specifically, he expects the December 2016 quarter, with an anticipated "iPhone 7" product upgrade, to set a new quarterly record for the company.
Seeing continued growth in the future, Wells Fargo Securities has maintained an "outperform" rating for shares of AAPL. But the report was issued Monday before markets opened, when shares of the company were down more than 2 percent, hovering just above $100.
Shares of AAPL recovered slightly Monday morning, returning to a price over $102, up from a daily low of $100.22.
The company was dinged by a pair of reports issued on Tuesday, claiming that Apple was planning to cut iPhone 6s orders by 30 percent from its originally anticipated numbers. It was suggested that demand for the flagship iPhone 6s series has been lower than Apple expected.
However, other reports also support Um's thesis that Apple's more affordable iPhone models could be picking up slack. Creative Strategies analyst Ben Bajarin said on Twitter that his own data and checks suggest older models have proven popular in recent months.
Investors should have a clearer picture on Jan. 26, when Apple will reveal the results of its just-concluded holiday quarter, and also provide guidance for the current March quarter.
Analyst Maynard Um reduced his "valuation range" for shares of AAPL to between $120 and $130 on Wednesday, down slightly from his previous range of $125 to $135. Um said he was erring "on the side of conservatism" given recent concern over iPhone 6s sales in the current March quarter.
He said those issues are not surprising to him, as iPhone sales growth tends to be softer during an "S" product cycle. But history has also shown that Apple can also find unit strength from lower end models, Um said, noting that the iPhone 4s performed well during the iPhone 5s product cycle.
And while Um said there is "potential" for iPhone sales to fall year over year in the March quarter, he doesn't believe Apple's hot selling handset has "peaked."
Specifically, he expects the December 2016 quarter, with an anticipated "iPhone 7" product upgrade, to set a new quarterly record for the company.
Seeing continued growth in the future, Wells Fargo Securities has maintained an "outperform" rating for shares of AAPL. But the report was issued Monday before markets opened, when shares of the company were down more than 2 percent, hovering just above $100.
Shares of AAPL recovered slightly Monday morning, returning to a price over $102, up from a daily low of $100.22.
The company was dinged by a pair of reports issued on Tuesday, claiming that Apple was planning to cut iPhone 6s orders by 30 percent from its originally anticipated numbers. It was suggested that demand for the flagship iPhone 6s series has been lower than Apple expected.
However, other reports also support Um's thesis that Apple's more affordable iPhone models could be picking up slack. Creative Strategies analyst Ben Bajarin said on Twitter that his own data and checks suggest older models have proven popular in recent months.
Investors should have a clearer picture on Jan. 26, when Apple will reveal the results of its just-concluded holiday quarter, and also provide guidance for the current March quarter.
Comments
So what can an iPhone 7 bring to the table that isn't simply thinner?
Wireless earbuds? Removal of home button?, better battery life? OLED?
All nice, but is it enough to sway someone with an iPhone 6 to upgrade?
I doubt it is certain that the real figures would be $120 or anything like that, however going on 60 minutes didn't help much.
2) People think Donald Trump is interesting, too.
He isn't the investor that he has portrayed for years.
He is a gambler, and he got caught up in the Casino.
Unfortunately, he might not be able to wait for the market to shift back to quality, and AAPL.
Personally, and I own no AAPL, I would want Tim to continue on the path of broadening Apple's reach to more markets, and filling the pipeline with more of the niche hardware (merely 10's of millions of units) and continue bolstering the ecosystem.
At the very heart of the ongoing demise of Apple is that its products are not that impressive relative to competition as they had been before. As Jobs said, Cook is not a product guy. Job's foresight is evident in the several misguided steps that Cook took in product development and personnel.
For example, take a look at Cook's promotion of Jony Ivy. The guy is a very good hardware designer but he is not a software guy. Ivy tries to perfect minute OS details like curvature or spacing of letters (San Francisco font anyone?), but fails to address the elephant in the room: Apple sucks, and sucks mightily, in the cloud! Without a strong cloud and everything that comes with it (effortless syncing, AI assistance, ability to move smoothly from one device to another), today's smartphone or computer company can't succeed. Apple Watch is another manifestation of Ivy's misguided drive for perfection. I could go on but am afraid Apple die hards would call me a troll (you probably would call me a troll anyway because you are so invested in Apple that it hurts to hear the painful truth).
In short, under Cook's wings Apple products are not so much above and beyond the competition to justify Apple being the most valuable company in the world. The profit growth will decline, low P/E be damned, and with the lower profit growth so will go AAPL price. Mark my words, the day is coming when Apple will be dethroned from its "the most valuable" title, as said as it might be.
Could Carl makes a move on the Apple board and Tim Cook? Is his holding big enough to have an impact? Is he so quiet because he's up to something? Pressuring Cook to buy back Apple stock while he hangs on to his own chunk would surely serve to increase the voting influence of his holding. Wait for a rough patch, get some fund managers on-side and go for a spill?
Apple's cash hoard must be such a tempting target.
I'm probably severely overestimating the relative importance of his stake and spouting a load of nonsense. :-)
Cook gave his guidance at an investor meeting last year: if you don't like the way he runs the company then sell your shares.
Oh, and man up and ban yourself like you said you would.