Apple Inc.(NASDAQ:AAPL) shares are have started
attracting more sellers than buyers in the recent weeks as the stock has
retreated about 10% from its all time high of $705.07 on Sep 21, 2012 as
investors have digested the company’s latest launch of iPhone5.
However, AAPL’s shares bounced back smartly from
intra day’s low of $623.55 and now down by just 0.40% to $635.68. Out of the
past 12 trading sessions, the stock has managed to ended lower in the past
eight trading sessions since September 21, the day when it had announced its
first weekend sales for iPhone5.
Considering the recent fall in the stock, Shaw Wu,
an analyst at Sterne Agee, remains optimistic on the stock stating that the
recent fall of 10% is just a follow up correction after a big run-up. Demand
for the iPhone 5 remains strong, and supplies of needed parts are improving.
The production bottleneck now lies in assembling the phones, he said.
However, on the other hand, Analyst Stuart Jeffrey
at Nomura Securities turned bit pessimistic from the long-term view. After
2014, Apple's earnings growth rate will go from today's heady rate of more than
50 percent per year to less than 10 percent, Jeffrey predicted.
He stated that by then, almost everyone who can
afford one in the developed world will have a smartphone. In developing
countries, there will still be some growth, but competition on price will make
the iPhone less profitable for Apple, he wrote.
The firm has a neutral rating on the stock, while
the price target is $710, about 4% lower from the CMP.
Analysts expect Apple's next product launch to be a
smaller version of the iPad, to be announced within a month.
Now, the next trigger for the stock would be its upcoming
earnings on Oct. 25 for the fiscal fourth quarter.
However, even if we consider the latest slid, Apple
is still the most valuable company in the world with about $600 billion in
market cap.
Until users become more enlightened, and/or less concerned with image, Apple will continue to be successful. Their products have trailed the competition for at least 2 years (more in the computer segment) in performance, security, usability, features.
ReplyDeleteYet, they still sell in droves because they look pretty and users want to be cool (not necessarily bad traits, but the exorbitant prices Apple charges for these privileges should have long-negated them, considering the inferiority of their products)