Apple Analysts Take Stock and Its Shares Wax and Wane (Mostly Wane)
Earlier today in trading, shares of Apple briefly dropped below $500 for the first time since February, largely due to more rating cuts by Wall Street analysts.
The stock did manage to rally later, ending up on a slight rise of 1.8 percent to close at $518.83 for the day.
But the worries are increasing about the usually high-flying stock, which is down almost 26 percent over the last three months. (That said, Apple shares are up just above 28 percent for the year to date.)
Still, analysts are fretting, such as Citigroup, which had only recently initiated coverage with a buy rating for Apple at the end of November. Last night, it moved to a neutral rating and slashed the price target for shares from $675 to $575.
The biggest new worry is the sales of Apple’s latest device, with Citi’s Glen Yeung noting that “near-term supply chain order cuts, while inconclusive in nature, bring into question the strength of iPhone 5.”
Citi is one of several downgrades of late for Apple; today’s included dings from Canaccord Genuity and Pacific Crest Securities.
Now, without another product in the immediate pipeline and fears that the company’s competitiveness in the smartphone market is waning, the Cupertino, Calif., company is in the unique position of needing a new “wow” product in the months ahead to spur a rally.
There are some bright spots, though. Apple said it had sold two million iPhone 5’s over the weekend in China and a new Morgan Stanley report is indicating that iPhone and also iPad demand remain high.
But, while there has been swirl around a new take by Apple related to the television, many investors and also fans (see this great essay by Brightcove CEO Jeremy Allaire) are clearly hoping for even more.