Apple Inc. (NASDAQ: AAPL) was downgraded Tuesday to Underperform from Outperform at Calyon Securities. The analyst cut the EPS estimates and set a $90 price target on the stock. Why? Mostly due to concerns over Mac sales because of the recession and the fact that Apple has a premium pricing model on its Macs. Interestingly, the analyst also cut iPhone unit estimates slightly. Steve Jobs' health was also mentioned as a concern.That wasn't all, another analyst at Kaufman Bros. trimmed his revenue estimates for the current quarter, but kept EPS estimates the same and the Buy rating.
Despite all that, the stock managed to close up 3.8% to $90.25. Why? Well, perhaps because it was Steve Jobs' birthday, or perhaps because rumors have been swirling that Apple has struck a deal with China Unicom to bring the iPhone to China and that the 3G iPhone may appear there already in May 2009.
Even if Mac sales are hit by the recession, and so far Ars Technica explains why that's not the case and that Apple actually had its best quarter, the iPhone entry into China could offset any weakness from the Mac segment. The iPhone continues to make headway into the smartphone market as the iPhone 3G managed to claim second place for a second consecutive month. As for the iPhone App prices tanking, that has no affect on Apple, unless it's indicative of a different problem (other than that there's a recession going on), which now is hard to see.
As for the Netbook concerns. How is it even a concern? No doubt Apple will come out with a great one if it deems the market lucrative enough. I can already see a mix of iPhone and Mac technologies or something of the sort as so many have speculated.
Apple still has a lot of innovations to bring forth, I'm sure, to the delight of users and shareholders.
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Reader Comments (Page 1 of 1)
2-25-2009 @ 9:09AM
Beltway Greg said...
China, China, China. At this point in time it's fundamentals. Apple, at this writing, has perhaps the cleanest balance sheet in the world and the best near-term momentum. Let me repeat, they're the leading music retailer, the most successful retailer, by far the most innovative company, and the dog that is wagging the tail of the cell/smart phone industry. Plenty of Chinese people have IPhones and computers. The Chinese are swell folks but the same thought process that prompted them to build the wall has pushed them to want to control the Apple. One thing though is for sure, if the middle class stops growing in China and income begins to decline, the political and economic power that results from the increased purchasing power will be gone with the wind. The Golden Age will have ended with the Beijing Games and they'll become nothing more than a glorified fund of funds for US debt. And yes, they'll have to keep buying because if
they don't finance our folly billions of out of work peasants will land in the cities and instead of the Anarchy in the UK, they'll have Anarchy in Shanghai and then they really will need to tear down that wall.
2-25-2009 @ 12:17PM
Walt French said...
The big brokers or a few very widely-followed analysts move stocks, but the general signal-to-noise ratio of analyst calls is so minuscule that I'm surprised the BStox pretends to care what they think.
(Of course, the same goes for why the price moves. Bernanke's Humphrey-Hawkins testimony yesterday, for example, was followed by a strong surge in the indexes. In his testimony, he said that all the Gummint's fiscal, monetary and regulatory efforts must work just right, and that other nations will have to be exceptionally smart, too. I.e., an alignment of planets not seen since 1705 or so. Go figure.
2-27-2009 @ 4:43AM
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