Neil Hughes
A number of analysts reduced their price targets for Apple on Wednesday, though one who just met with the company's executives said those officials are "very optimistic" about the product pipeline and market position.
Ben A. Reitzes of Barclays Capital met on Wednesday with Apple Chief Financial Officer Peter Oppenheimer and Senior Vice President of Worldwide Marketing Phil Schiller. At the company's Cupertino, Calif., headquarters they discussed a number of topics including potential uses for the company's cash as well as future prospects for the iPhone and iPad.
Unsurprisingly, the officials did not hint at where Apple may go in the future. But they did express confidence to Reitzes about where Apple is positioned.
"We believe there is an undying dedication at Apple to innovate — and its leadership is working hard to prove bears wrong," he said. "We believe the company has a strong product pipeline ramping in (the second half of calendar 2013) — with new platform innovations as well, in our opinion."
Reitzes still believes that Apple will introduce a lower-cost phone based on the iPhone 5 design later this year, along with a next-generation "iPhone 5S."
But the analyst still lowered his price target on Wednesday, from $575 to $530. Reitzes stressed that this reduction was not a result of his meeting with Schiller and Oppenheimer, but was instead something that his team has been considering for days.
Source: Barclays Capital.
Barclays wasn't alone on Wednesday in reducing its price target for AAPL stock, as Citigroup — which has been bearish on Apple for months — lowered its projection from $500 to $480. As noted by Philip Elmer-Dewitt of Apple 2.0, Citi's target is one of the lowest forecasts among Wall Street analysts.
And Adnaan Ahmad of Berenberg Bank went one step further, calling the smartphone investment "dead" in a note to investors on Wednesday. He believes investors should concentrate on the smartphone "trade" with companies like Apple and Samsung, rather than long-term holdings.
"Apple and Samsung margins are peaking and growth is going to be driven by the margin-dilutive mid-to-low-end segment in the next 24 months," he said. "In our opinion, this will translate into poorer industry fundamentals."
Charles Martin
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89 Comments
That's nice. How about announcing some of those products so we can share in your optimism because we're kind of tired of watching our stock holdings yoyo on a daily basis, or otherwise just keep quiet until you actually have something to talk about?
You know when you guys make these charts, you might want to include this thing called "the date." Only some stock weenie actually knows when "Q2" ends and "Q4" begins. Why not use those "Month" things on the chart so we can actually know what your prediction is?
Was it expected that Apple would say: yes, it's true, our upcoming products really suck, and you should sell all your stock. In fact, take a short position... Talk about "content free"
Mark my words. Investors whose horizons are 3 - 5 years out -- and not that of noise-traders and hedge funds -- will look back and wonder why they did not double up on AAPL at this price.
Cook calls everything they release "great' and "perfect" even when the newest items is modifying a prior product that was also "perfect." Hey, it's great to be optimistic, but if everything is always "great" then great becomes the new average. Not saying they wont continue to be a cash cow, but EPS contraction will start next quarter and continue unless they come up with a new, high margin product that would have mass appeal. So lets get the dividend up to 3.5% and at least make the wait more enjoyable.