Early Apple Bear Turns Bullish on Apple

[MacRumors]

One of the first analysts to to turn bearish on Apple last year, correctly predicting lower-than-expected revenues, has upgraded the stock to a Buy, giving it a 12-month target price of $540 against a closing yesterday of $428.35.

BTIG analyst Walter Piecyk is cited in Business Insider as suggesting that Apple's earnings per share will be flat or slightly down this year but will climb in 2014.

He bases the potential growth on four factors: Apple will release a cheaper iPhone, carrier upgrade policies will make it easier for users to buy new iPhones, a new product will come out, and Apple will do something with its cash.

However, he also warns that Apple could miss analysts expectations this quarter, and might even miss its own guidance. That could crater the stock below $400 a share. But after that, he sees things smoothing out and improving for Apple.

The difficulty in forecasting future revenues in a company noted for secrecy around new product launches is acknowledged, but Piecyk includes an assumption that Apple will launch a new category that will generate $5 billion in revenues. Apple is widely assumed to be planning to launch both a smart watch and an HD TV.

Bears will note the absurdity of assuming that any company can simply come up with a $5 billion product while Bulls will call it an overly conservative rounding error for a company generating $200 billion in revenue and which has beaten consensus revenue estimates by billions of dollars in recent years. Both arguments are valid and the harsh criticisms will be merited.

Article Link: Early Apple Bear Turns Bullish on Apple

[Rocketman]

The iPhone upgrade ecosystem is an additive thing. It is an annuity. That is the majority of Apple's revenues and profits. Everything else is noise.

Rocketman

[darijoe]

Fair enough prediction I'd say. Apple really hasn't shown too much to get excited about for around 5 months and the share price has dropped about 40% since the $700+ peak in September. It's your time to deliver and shine, Tim Cook!

[applesith]

Does it really matter? It's clear no matter how much Apple sells or how amazing their future products are, WS has decided it well never again be good enough. This is what happens when the media runs everything and decides thins and reports with an agenda. Most people don't think for themselves and just take the opinion of the media outlet with them.

[Squilly]

I'm all in if it drops to $400. Been wanting this stock for a while.

[ArtOfWarfare]

Originally Posted by Squilly

I'm all in if it drops to $400. Been wanting this stock for a while.

I was just thinking the same thing... I've never owned any stock before though, and I'm 40k in debt from school, so making a risky decision like this is probably a bad idea...

[Squilly]

Originally Posted by ArtOfWarfare

I was just thinking the same thing... I've never owned any stock before though, and I'm 40k in debt from school, so making a risky decision like this is probably a bad idea...

Can't go wrong with Apple. I still think it'll shoot up once it hits its absolute bottom.

[cardfan]

I'd wait til it drops lower. But what the anaylst said is rubbish. An iWatch or tv isn't going to mean anything. Carrier upgrade policies easing? What's he smoking? And finally a less expensive iphone means lesser margins.

What would raise the stock IMO is Apple getting serious about knocking down barriers to entry that the competition is eating its lunch on. Retina+ screens (double the current iphone resolution) at 5" would go a long way. Theme store to customize iOS.

Apple is a hardware company that needs to find ways to shift into software. Itunes match and icloud (charging for more storage) is one way but it could be done much better. So far, I've no need for either. But add some more benefits to it and they could have a better revenue stream.

The Apple tv is a low margin product that could be done much better. Beef it up, add some storage to it, add bells and whistles that are compatible with idevices and sell this.

Pretty obvious stuff though and I'm sure Apple has it mapped out.

[needfx]

don't know what to do with my imaginary stock

[Ventilatedbrain]

I think wall street has fallen out of love with apple , they are in love with Google and everything they do is gold .. It doesn't necessarily depict any of the companies performances

[Fenir]

Originally Posted by Squilly

Can't go wrong with Apple. I still think it'll shoot up once it hits its absolute bottom.

Can't go wrong...if you can front the money for the stock. At 400 a share, and being you said 40k in debt, you could buy one...two...three shares maybe?

At which case you're going to have to wait a couple months (most likely) to get some money back? It's great if you had an infinite amount of money to throw around, but being at 400+ a stock means we can only buy a couple shares.

[M-O]

Originally Posted by Ventilatedbrain

I think wall street has fallen out of love with apple , they are in love with Google and everything they do is gold .. It doesn't necessarily depict any of the companies performances

investors make money on the rise. they see apple as plateauing and are looking for the next big thing. my guess is that they are betting pretty hard on google glass.

in reality, it's all about the rumors with apple. the bears all reference "iTV getting pushed to 2014" or "low cost iPhone will be too expensive" or "iPhone 5s pushed from july release to fall".

none of these things even exist. none of the release schedules are known. it's all rumors and speculation.

[samcraig]

Apple the company is not the same as AAPL the stock.

[dysamoria]

To to. First sentence.

Proofread.

[pgiguere1]

I might sell before the next quarterly report and re-buy right after.

The iPad mini cannibalizing sales of the higher margin iPad isn't a good thing, people might freak out seeing 9.7" iPad sales being lower.

[Mr. Retrofire]

Originally Posted by MacRumors

BTIG analyst Walter Piecyk is cited in Business Insider as suggesting that Apple's earnings per share will be flat or slightly down this year but will climb in 2014.

I do not see, why they should climb in 2014. Apples current strategy is: Zero innovation, more restrictions in the OS-platforms, and so on.

[SockRolid]

Originally Posted by MacRumors

... The difficulty in forecasting future revenues in a company noted for secrecy around new product launches is acknowledged ...

There. Someone finally admitted it. Apple just doesn't tell anybody what they're working on.
Therefore, analysts are forced to make up even more stuff than normal when they "forecast" apple.

Oh, and by the way, female analysts are 7.3% more accurate than male analysts.
The women, apparently, are more concerned with being correct.
The men, apparently, are more concerned with competing against each other.

http://www2.mccombs.utexas.edu/Facul...nalystsJAR.pdf

http://ideas.repec.org/a/bla/joares/...2p393-435.html

http://www.techrepublic.com/whitepap...alysts/1903609

Originally Posted by MacRumors

... He bases the potential growth on four factors: Apple will release a cheaper iPhone, carrier upgrade policies will make it easier for users to buy new iPhones, a new product will come out, and Apple will do something with its cash.

Yup. Those are all important. But a deal with China Mobile is more important.

[ConCat]

Originally Posted by samcraig

Apple the company is not the same as AAPL the stock.

Yep. Stock price relies heavily on what investors "think" is going to happen, rather than anything concrete. It just means that a lot of people are dumping their stock, possibly due to high inflation which is due to hit sometime this year.

[poppy10]

Originally Posted by SockRolid

There. Someone finally admitted it. Apple just doesn't tell anybody what they're working on.
Therefore, analysts are forced to make up even more stuff than normal when they "forecast" apple.

Nah. iPad mini was widely trailed for months before it was officially announced. And the analysts didn't like it.

[genovelle]

Originally Posted by Mr. Retrofire

I do not see, why they should climb in 2014. Apples current strategy is: Zero innovation, more restrictions in the OS-platforms, and so on.

Restrictions are a good thing. There is nothing worthwhile on Android that wasn't on iPhone either natively or with an App already. This includes Swype
which the company who makes this for Google bought the original maker on the iPhone and killed it the same month they released it's beta of Swype on Android. They steal every idea and have nothing of their own. Well they do have the openness. And the Malware.

http://techcrunch.com/2013/03/07/f-s...6-in-q4-alone/

[aidanpendragon]

Originally Posted by ArtOfWarfare

I was just thinking the same thing... I've never owned any stock before though, and I'm 40k in debt from school, so making a risky decision like this is probably a bad idea...

They always say don't buy stocks if you can't afford to lose. Sounds like you can't afford to lose. I know somebody who bought at 550 and is ticked.

[ArtOfWarfare]

Originally Posted by aidanpendragon

They always say don't buy stocks if you can't afford to lose. Sounds like you can't afford to lose. I know somebody who bought at 550 and is ticked.

Thank you for the advice I will wait until I actually have some spending money.

[SockRolid]

Originally Posted by poppy10

Nah. iPad mini was widely trailed for months before it was officially announced. And the analysts didn't like it.

True. So much for "doubling down on secrecy."

But I'd say that about half the analysts didn't like it.
The half that thinks Apple needs higher average revenue per unit didn't like it.
The half that thinks Apple needs "market share" loved it.

[MrNomNoms]

When are we going to have analysts actually use real data rather than speculating through looking into a crystal ball claiming to have some sort of 'vision into the future'. The questions that should be asked isn't just on the 'new product' front but customer retention rates when compared to other consumer electronics companies. It is all very well to sell products but if it is a one off sale without any loyalty or repeat purchasing then it doesn't really matter a hill of beans at the end of the day.

[jncoanalog]

Originally Posted by SockRolid

(...)

Oh, and by the way, female analysts are 7.3% more accurate than male analysts.
The women, apparently, are more concerned with being correct.
The men, apparently, are more concerned with competing against each other.

(...)

Well, if only we could restrict that comment to analysts...
Men seem to always (or at least 99.9% of the time) be more concerned with competing against each other, leaving the difficult task of being correct to the women!
Couldn't we just hand them (women) the world already?

P.S.: no irony here, I'm being dead serious...