Merrill Lynch upgrades AAPL to 'Buy,' says worries factored into current price

Bank of America Merrill Lynch upgraded Apple stock from "Neutral" to "Buy" on Tuesday, with an analyst at the firm suggesting that any worries about channel or supply chain checks are already factored into share prices.

Apple's situation is unchanged in China, and any talk of iPhone demand peaking is just that, said Wamsi Mohan in an investor memo obtained by Forbes. Some analysts have been concerned that demand for smartphones is flattening out, and that this could affect Apple, which still reaps the greatest amount of its revenue from iPhone sales.

Chinese iPhone demand is "strong," Mohan argued, citing a Merill Lynch survey. The firm is in fact calling for a $130 price target, even with Apple shares currently trading at or below $100.

The Chinese economy has taken a beating in the past week, and the country's turmoil could in theory hurt demand local demand for the iPhone. Although the product is popular in the region, it's even more expensive in China than it is in the U.S., potentially putting it on the chopping block for shoppers looking to save money.

On Monday, investment firm Piper Jaffray lowered iPhone shipment estimates to 55 million units for the March quarter, while still calling Apple its top stock pick for the year. The reduced forecast was in response to multiple reports indicating that Apple has cut iPhone production orders.

6 Comments

SpamSandwich 32917 comments · 19 Years

About 8 years ago

Blech. These scumbag analysts disgust me.

5150iii 96 comments · 9 Years

sog35 said:

I guess Wall Street got the price level they wanted. They probably loaded up on sub $100 shares. Now they will pump this up for the rest of the year. Many pump points this year for Wall Street to manipulate:

1. Dec earnings beat. Wall Street will be 'shocked' we have not reached peak iPhone
2. March guidance will show revenue growth
3. Expanded capital plan - dividend goes up and larger buyback
4. Watch2 and 4 inch phone in the Spring
5. iPhone7 hype
6. LiveTV plan, Apple Music reaches 20 million users
7. Official sneak peak of the Apple Car

With all that pumping I can see Apple reach $150-$160 this year. I will sell immediately and wait for Wall Street to bash the stock again early next year when they bring up peak iPhone again.

This is what I am thinking as well. Beat it down to a better entry point and then ride it up.

jkichline 1369 comments · 14 Years

sog35 said:

This is how Wall Street makes a killing on Apple stock.Step 1 - pump up the stock to all time highs $134
Step 2 - short the stock at it's peak $134
Step 3 - Bash the stock for months. Close short at $95
Step 4 - Rebuy stock at $95. Repeat step 1.

Wall Street uses their analysis, CNBC, Wall Street Journal, ect as their propaganda machine to bash or pump the stock.
This is why I think Tim Cook should begin to address these baseless rumors Wall Street uses to bash the stock. Look at the rumor of Apple developing an iOS to Android App. That was shot down in 24 hours. Why can't Apple shoot down baseless supply chain rumors like that?

Probably because they are true in that the business of other companies is "down" even though they do not effect Apple. Apple does not own these suppliers so they will not speak for their business and Apple has already provided their guidance and communicated that they are excited about their growth. So why do they have to say anything? Let the analysts be stupid and pump the stock. If you are planning to short Apple, then follow the analysts. Otherwise go long on Apple and you'll always win.

jfc1138 3090 comments · 12 Years

sog35 said:

I guess Wall Street got the price level they wanted. They probably loaded up on sub $100 shares. Now they will pump this up for the rest of the year. Many pump points this year for Wall Street to manipulate:

1. Dec earnings beat. Wall Street will be 'shocked' we have not reached peak iPhone
2. March guidance will show revenue growth
3. Expanded capital plan - dividend goes up and larger buyback
4. Watch2 and 4 inch phone in the Spring
5. iPhone7 hype
6. LiveTV plan, Apple Music reaches 20 million users
7. Official sneak peak of the Apple Car

With all that pumping I can see Apple reach $150-$160 this year. I will sell immediately and wait for Wall Street to bash the stock again early next year when they bring up peak iPhone again.

Yes I've ignored previous cycles due to my low entry point ($5.0743) but I may just decide enough is enough sometime this year. If for no other reason that to free myself from the unending stream of crap I'll otherwise feel compelled to read to monitor the position.

jhorwich 1 comment · 8 Years

Wamsi is the biggest fade there is,. Thank heavens for his calls....I have made a ton of money fading him....stay well and stupid my Merrill analyst...you are the worst anywhere....