Analysts Share in Blame for Apple's Stock Drop, Says Fortune

[MacRumors]

The 10% drop in Apple's share value following the company's earnings release earlier this week was not entirely the fault of Apple, Fortune suggests, but rather that of overheated analyst predictions.

Fortune assessed the accuracy of the predictions made by 68 analysts, and found that revenue figures ranged from $51.7 billion to $65.69 billion against Apple's actual performance of $54.51 billion. It produced a ranking of the analysts by the percentage errors in their predictions for both revenue and earnings per share, as well as overall performance metrics.

The analysts responsible for the sometimes wildly optimistic forecasts were not, said Fortune, doing Apple any favors.

The company didn't have a bad quarter. In fact, it posted its best quarter ever ... But the stock market is an expectations game and Apple is expected to blow past analysts' estimates, not miss them.

The Fortune piece wryly observed that 'another way of looking at it is that Apple's analysts did worse than the company this quarter.'

Going forward, Apple has altered the way in which it provides guidance for upcoming quarterly performances. While the company had previously issued single "conservative" guidance estimates for both revenue and earnings that led to the expectation that Apple would always handily beat that number, it is now providing a range of guidance numbers for revenue and other factors.

Apple believes that the range will provide a more realistic idea of where the company expects performance to fall, although it is no longer providing any specific earnings per share guidance and instead allowing analysts to develop their own numbers based on the ranges of revenue, margin, expenses, and tax rate the company expects.

Article Link: Analysts Share in Blame for Apple's Stock Drop, Says Fortune

[Ryth]

Fortune? Why does this go to a CNNMONEY story at Apple 2.0?

[Killa Aaron]

Stupid analyst, one of the reasons why the economy is so messed up, listening to these dummies.

[sza]

Originally Posted by Killa Aaron

Stupid analyst, one of the reasons why the economy is so messed up, listening to these dummies.

Analysts are not stupid, the listeners are.

[shotts56]

Originally Posted by sza

Analysts are not stupid, the listeners are.

Correct. Analysts don't move share prices, people who buy & sell shares do.

But when it goes wrong for you, culture these days is to find someone to blame. "Boo hoo, it was all those nasty analysts fault". The same as six years ago when you could no longer afford the mortgage that you committed to, "Boo hoo, it was all those nasty bankers fault".

There's always someone else to blame.

[kas23]

Here, maybe you guys can understand this (also nowhere to be found on MRs):

http://www.businessinsider.com/annotaded-charts-why-apples-world-record-breaking-business-doesnt-impress-investors-2013-1?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+typepad%2Falleyinsider%2Fsilicon_alley_ insider+%28Silicon+Alley+Insider%29&utm_content=Google+Reader

[chagla]

Originally Posted by Killa Aaron

Stupid analyst, one of the reasons why the economy is so messed up, listening to these dummies.

short term memory eh? it was in fact some analyst just a few days ago when apple share was declining and right after his comments, share went up instantly. it hasn't been that long. google it.

it is OK for analysts to always say positive about apple, never negative.

[powerslave12r]

.. was not entirely the fault of Apple, Fortune suggests, but rather that of overheated analyst predictions

This is the funniest thing I've read all day.

[madsci954]

So what they're saying is...

Dear analysts,
Shut the hell up!
Sincerely,
Fortune

[Tankmaze]

But the stock market is an expectations game and Apple is expected to blow past analysts' estimates, not miss them.

so analyst would predict an expectation like say... 10000% growth for apple and when it doesn't meet their expectation, the stock plummet ?
good job analyst !

[Simplicated]

Originally Posted by Tankmaze

so analyst would predict an expectation like say... 10000% growth for apple and when it doesn't meet their expectation, the stock plummet ?
good job analyst !

Exactly. These analysts set an impossible-to-meet target and then cause the stock to plummet. That's why I hate these m**********rs.

[AppleAlfred]

Originally Posted by Simplicated

Exactly. These analysts set an impossible-to-meet target and then cause the stock to plummet. That's why I hate these m**********rs.

The analysts don't "cause" the stock to plummet, it's all the stupid traders selling the stock because it doesn't meet expectations. If people knew anything about investing, they would realize that Apple is now way undervalued and is still a solid company. I'll be gobbling up as many shares as I can, and if you've looked a lot of analysts still have much higher targets on Apple.

[charlituna]

Originally Posted by AppleAlfred

The analysts don't "cause" the stock to plummet, it's all the stupid traders selling the stock because it doesn't meet expectations.

Yes and no. The traders listen to the analysts and many of them are making wild guesses at what they think Apple will perform based on zero do knowledge about upcoming products, production line issues and so on.

Apple knows these things and based their numbers in that knowledge. So what the analysts really should be doing is asking if Apple can make their own estimate based on what is going on like product launches, new services etc.

But they just make up numbers that aren't likely to be met and the traders trust them and follow their 'didn't met expections' doom and gloom

----------

Originally Posted by Ryth

That's my one issue with Tim right now. Steve responded to BS if it threatened the company and came out like a lion.

Tim Cook is not Steve Jobs, he is not going to act like he is etc. mainly because folks would see right though it and see that 'he's just fronting like he's Steve,major lame'

And Tim did call out the analyst BS in the earnings call. It was brought up by several sites. He didn't cuss at them and tell them to **** or call out names but he did point it out in his own quieter style.

[palmharbor]

The stock market buyers and seller act on rumor...hyped opinions by big firms who have already sold short...its the home of "panic". At one time they loved MicroSoft and though Apple was just a computer used in schools and Ad agencies and there was no future for the firm. They also thought at one time
Sony was a great buy and would always do great things and the price of Sony was way pumped up. If you watched Cramer the Stock Guru on CNBC and bought on his tips you would have lost money each time. I did.
Larry Kudlow on CNBC who predicted the market was going to tank in December then in January and he of course was wrong both times.

[kas23]

The problem with MacRumors is that it chooses to exclude certain news stories. The news stories presented usually paint a rosy picture for Apple. So, when people see the stock prices fall, they become confused. They then start searching for excuses. MacRumors should also be reporting this:

http://www.businesswire.com/news/hom...s-Reach-Record

And this:

http://www.businesswire.com/news/hom...n-Characterize

Once people read these articles, they'll be more prepared to see a falling Apple stock price instead of looking for excuses.

[extricated]

"not entirely the fault of Apple"

You think?
Apple had record-breaking earnings for yet another quarter.

[JGRE]

Analysts think they have to comment any company even if they they don't understand squad about the strategy and performance of the company. They only want to bring sensational stories which make them look good. It is all about sensation and greed.

[notjustjay]

This shouldn't surprise anybody. We go through this right here on these forums with every Apple product launch.

It's always the same. In the weeks before the product launch, the rumors start flying. The new product will have a brand new design! It'll be thinner! Lighter! With twice the power! And there will be a price drop! And a spec bump across the line! The whole line-up will be updated! No, replaced! No, this is going to be the start of a brand new product category! Here are some product mockups. Here's what these could look like!

Then the discussion starts flying. "Here's what I'd like to see!" People start predicting entire product lines, including estimated pricing, and start drooling about how awesome it's all going to be.

Then the product announcement happens. It's a new version number with a reasonable spec bump. The form factor is the same as last year's model but the price drops slightly. It's a competitive upgrade, but nothing revolutionary.

And then the complaining starts... What happened to the revolutionary new design? What happened to the brand new product line? We're so disappointed!

Nothing "happened to it". You guys made it all up in the first place. There's no way those expectations could ever have been met.

Every. Single. Time.

[macs4nw]

Originally Posted by notjustjay

This shouldn't surprise anybody. We go through this right here on these forums with every Apple product launch.

It's always the same. In the weeks before the product launch, the rumors start flying. The new product will have a brand new design! It'll be thinner! Lighter! With twice the power! And there will be a price drop! And a spec bump across the line! The whole line-up will be updated! No, replaced! No, this is going to be the start of a brand new product category! Here are some product mockups. Here's what these could look like!

Then the discussion starts flying. "Here's what I'd like to see!" People start predicting entire product lines, including estimated pricing, and start drooling about how awesome it's all going to be.

Then the product announcement happens. It's a new version number with a reasonable spec bump. The form factor is the same as last year's model but the price drops slightly. It's a competitive upgrade, but nothing revolutionary.

And then the complaining starts... What happened to the revolutionary new design? What happened to the brand new product line? We're so disappointed!

Nothing "happened to it". You guys made it all up in the first place. There's no way those expectations could ever have been met.

Every. Single. Time.

Gotta hand it to you, that's a pretty accurate analysis! And these rumors seem to go on for months, rather than weeks, after which come the parts leaks that only seem to create more confusion and stoke even more speculation. As much as I hate to admit it, being here, we're all part of it.

[JGRE]

Originally Posted by notjustjay

This shouldn't surprise anybody. We go through this right here on these forums with every Apple product launch.

It's always the same. In the weeks before the product launch, the rumors start flying. The new product will have a brand new design! It'll be thinner! Lighter! With twice the power! And there will be a price drop! And a spec bump across the line! The whole line-up will be updated! No, replaced! No, this is going to be the start of a brand new product category! Here are some product mockups. Here's what these could look like!

Then the discussion starts flying. "Here's what I'd like to see!" People start predicting entire product lines, including estimated pricing, and start drooling about how awesome it's all going to be.

Then the product announcement happens. It's a new version number with a reasonable spec bump. The form factor is the same as last year's model but the price drops slightly. It's a competitive upgrade, but nothing revolutionary.

And then the complaining starts... What happened to the revolutionary new design? What happened to the brand new product line? We're so disappointed!

Nothing "happened to it". You guys made it all up in the first place. There's no way those expectations could ever have been met.

Every. Single. Time.

Right, there were even "smart people" complaining where the holographic keyboard went (http://obamapacman.com/2011/08/iphon...concept-video/). Get real!

[szw-mapple fan]

Originally Posted by JGRE

Analysts think they have to comment any company even if they they don't understand squad about the strategy and performance of the company. They only want to bring sensational stories which make them look good. It is all about sensation and greet.

greet? you meant greed right?

[JGRE]

Originally Posted by szw-mapple fan

greet? you meant greed right?

Yes, sorry for the typo.

[ovrlrd]

Originally Posted by kas23

The problem with MacRumors is that it chooses to exclude certain news stories. The news stories presented usually paint a rosy picture for Apple. So, when people see the stock prices fall, they become confused. They then start searching for excuses. MacRumors should also be reporting this:

http://www.businesswire.com/news/hom...s-Reach-Record

And this:

http://www.businesswire.com/news/hom...n-Characterize

Once people read these articles, they'll be more prepared to see a falling Apple stock price instead of looking for excuses.

Actually they have reported similar articles in the past, the problem is that they have almost no relevance as to the recent stock changes and have no reason to be mentioned in this kind of context. Market shares and vendor shipments have very little impact in stock market value, as hard as that is to understand.

[jm001]

What's your point? Both articles were positive for Apple and actually the first article was covered (the data at least) by Macrumors several days ago.

[kas23]

Originally Posted by jm001

What's your point? Both articles were positive for Apple and actually the first article was covered (the data at least) by Macrumors several days ago.

Those articles show Apple's slipping market share. The growth of Samsung is greatly outstripping the growth of Apple. If one actually looks at the numbers, not just read the headlines, they'll see that these numbers are actually not good news for Apple. The wording of these headlines is the real manipulation here.

Plus, give me a link of where MRs reported these number. They just came out yesterday.

----------

Originally Posted by ovrlrd

Market shares and vendor shipments have very little impact in stock market value, as hard as that is to understand.

Yep, paltry market share growth would have no impact on investor confidence in Apple.