Roger Fingas
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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41 Comments
[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.
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:
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.
@rogifan, nicely put.
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/