Apple stock closes first negative year since 2008, but Wall Street upbeat

Despite record-breaking quarterly earnings and continued market growth in the face of withering industry headwinds, Apple stock closed out 2015 down for first time since 2008, though analysts remain positive on the company's near-future prospects.

Apple shares stood at $105.26 at the end of Thursday, the last trading day of 2015, down 4.64 percent from the start of the year and 21.76 percent from an all-time intra-day high of $134.54 reached in April. The stock was negative 2.06 percent for the day.

As noted by Reuters, this will be the first negative year for Apple since 2008, when shares finished down 52 percent. Much has changed over the intervening years, however, including a stock split, substantial dividends payouts and huge open stock buybacks. Most recently, Apple's performance earned it a place on the Dow Jones industrial average, replacing AT&T in March.

As for 2015, declines removed about $57 billion from Apple's market capitalization, leaving the company valued below $600 billion. In context, Apple's value dropped by approximately 20 percent since its April high, and 17.5 percent since being added to the Dow.

Still, Wall Street analysts have faith in the world's largest company. According to Reuters, a check with 49 brokerages showed 41 hold a positive rating for Apple stock, while none have issued a "sell" rating.

Analysts from high-profile firms — RBC Capital Markets, J.P. Morgan and Morgan Stanley — recently glommed onto vague supply chain reports claiming lower than usual iPhone demand, eliciting a prompt slashing of quarterly shipment projections for the company's biggest money maker. FBR & Co. analyst Daniel Ives, who was the latest to model down, spoke with CNBC earlier this week about chinks in Apple's armor.

"I think the blooms are coming off the rose a bit for Apple. Not just in terms of the multiple, or in terms of what investors want to pay, but in terms of products," Ives said. "It's a make-or-break, white-knuckle period for Apple."

Specifically, the concern is that iPhone 6s won't be able to replicate the blockbuster success enjoyed by last year's iPhone 6 and 6 Plus, which addressed pent-up demand owing in no small part to consumers waiting for Apple's answer to Android phablets. Investors have come to expect persistent year-over-year growth for iPhone, especially as Apple pushes deeper into a burgeoning Chinese market, but it remains to be seen whether or not this year's "s" update was enough to drive yet another record-breaking quarter.

In a somewhat ironic turn, Piper Jaffray analyst Gene Munster surfaced as the voice of reason when he cautioned investors against taking action based on supply chain heresay. Munster's advisory echoes comments made by Apple CEO Tim Cook, who on numerous occasions said it is extremely difficult to extrapolate meaning form supply chain data, even if the information is correct.

"The supply chain is very complex, and we obviously have multiple sources for things," Cook said in a 2013 earnings call. "Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant for our business."

Apple introduced a number of new products this year, but more importantly entered new product categories. Apple Watch served as the company's first foray into wearables, while Apple Music leveraged Apple's considerable influence in digital music to competitor music streaming services. The fourth-generation Apple TV with its tvOS and dedicated App Store also stood out as evidence that Apple is making a serious play for the living room. Together, these new devices and platforms have the potential to pump significant capital into current revenue streams.

Looking ahead, Apple is expected to update iPhone, iPad, Mac and Apple Watch product lines in 2016.

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115 Comments

anantksundaram 18 Years · 20391 comments

About 8 years ago

Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.

fallenjt 13 Years · 4056 comments

sog35 said:

anantksundaram said:

Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.

Agree 100%

Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth. Apple has so many current and future revenue streams to easily double revenue from this point. But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

Something is wrong with Apple's investor relations. I can't even speak to a live person. I call the number and all you can do is leave a message. I left 3 messages and no one called back. I mean what the fuck. I have tens of thousands invested and they can't even return a fucking phone call?

Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF. You never hear this kind of shit directed at Google/Amazon/Microsoft CEO. Only Cook. Whatever he is doing, he is doing it wrong.

Stock value is on the paper. Did Apple actually lost billions of $? No!. It's like my home equity, which was up and down over the years but made no difference for me as an owner. Bottom line, Apple still make tons of profit, quarter after quarter, and that matters!

dmdev 9 Years · 33 comments

sog35 said:

anantksundaram said:

Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.

Agree 100%

Either Tim Cook needs to hire some new people who can articulate Apples vision and counter Wall street FUD or he needs to resign.

2015 was the most profitable year for any company in the history of man. Yet the stock is down 5% for the year. The main reason is because Cook failed to control the message of the company. The entire investing community views Apple as a one trick pony with a trick that has peaked. This is so far from the truth. Apple has so many current and future revenue streams to easily double revenue from this point. But Cook has failed at convincing Wall Street that iPad, Watch, AppleTV, ApplePay, Apple Car, Beats, Apple Music, ect have a bright future and can add hundreds of billions in future revenue.

Amazon CEO was able to convince Wall Street that Cloud services would be huge. But Amazon cloud generates less than $1 billion in profit. Apple Watch profits dwarf Amazon cloud. But Cook refuses to release Watch figures so Wall street gives Watch zero credit.

Something is wrong with Apple's investor relations. I can't even speak to a live person. I call the number and all you can do is leave a message. I left 3 messages and no one called back. I mean what the fuck. I have tens of thousands invested and they can't even return a fucking phone call?

Wall Street totally disrespects Tim Cook and pisses on his face. Various analysist have flatout called Tim Cook a liar and a cheat. Other said he was breaking SEC rules and manipulating numbers. WTF. You never hear this kind of shit directed at Google/Amazon/Microsoft CEO. Only Cook. Whatever he is doing, he is doing it wrong.

Not to sound cynical, but this performance works out pretty favorably for Apple's stock buyback program.

rumor-mill 8 Years · 13 comments

Wall Street is upbeat? Analyst are slashing iPhone estimates for 2016. They have also written off every other product sold by Apple. It is obvious that regardless of growth and profits this stock will continue to under perform. I am still wondering why Apple was not destroyed by Samsung as predicted a couple years ago......

delreyjones 17 Years · 337 comments

anantksundaram said:

Apple needs a completely new IR team, and a radically different messaging strategy when it comes to major market moves.

Right now, both are frustratingly disappointing, especially given the remarkable fundamentals of the business.

With due respect, I happen to be pleased that Apple is not over-reacting to Wall Street. I agree that Wall Street’s valuation is probably “incorrect”, but I disagree with the notion that Tim Cook is making mistakes. He’s steadily raising the dividend and perhaps, gradually, increasing the PR effort with more exposure to the press. We should think of the Market as a drunk, hysterical teenager and Tim Cook as the sober adult.

And yes, one of the most important things he’s doing is buying the stock. He thinks it’s a good deal at the current price and he’s putting money where his mouth is. I’m doing the same thing. You’re free to do the same. We investors can be impatient and greedy. The Market is worried that Apple will stumble and I’m only 95% convinced they’re wrong. There’s a risk in keeping your money in AAPL and many people, voting with their wallets, are more afraid than I am.

If you really believe the stock is undervalued, buy more. If you don’t have enough money to buy, that’s unfortunate but that’s how we get to vote in this game. Wall Street’s having an amazing sale on AAPL right now! Get out your wallet and express your confidence!