Apple: Is Its Stock Worth $360 or $800?

In the following video, Motley Fool senior technology analyst Eric Bleeker looks at Barenberg Bank's Apple (NASDAQ: AAPL  ) downgrade from a buy to a sell, with a shocking price target reduction from $800 per share all the way down to $360.

Barenberg notes that in the history of mobile commodization has taken over and the leaders have fallen behind. In 2005, investors placed their hopes behind temporary leaders like Motorola and its RAZR line and LG's Chocolate phones. Today, investors are placing their dollars behind comeback plays like Blackberry and Nokia

Yet, at Eric notes, in the past generation comeback plays were purely hardware based. Today's battle involves the value added from differing platforms. That could make inferences from the last battle in mobile less applicable to today's mobile world. More to the point, he describes how the idiosyncratic issues of the analyst world affect Apple today.  

As Eric shows, a look at the projections for Apple's next quarter illustrates its stock price fluctuations over the past six months:

Apple

Analyst Estimate for FQ2 2013

Current

10.23

1 month ago

10.27

2 months ago

12.17

3 months ago

12.52

6 months ago

13.05

9 months ago

12.77

12 months ago

10.8

18 months ago

8.44

Source: S&P CapitalIQ.

As projections were zooming north, Apple's stock price soared. Yet, as the iPhone 5 hit about six months ago, projections began to sour. In this time, reports began leaking that Apple's margins were under pressure. This all led to its stock price sinking over the past six months. When Apple was soaring, analysts jumped over each other for the higher price target, yet today they're angling to beat each other to water down expectations in coming quarters. 

In the video below, Eric discusses why investors are best off taking a two-year view and ignoring the short-term fluctuations caused by the games analysts play. 

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Read/Post Comments (16) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 06, 2013, at 11:57 PM, applefan1 wrote:

    AAPLe worth $200, long on BBRY?

    I hope you have some money stashed away for a rainy day because it you had that mentality, you'll be broke within a couple of years. BBRY customers have mentioned or have already moved to iPhones. Home Depot USED to have Blackberry, but they are rolling out iPhones to their corporate employees. Oops.

    I just think that Apple's readying some new products and one of these days they'll hit it even bigger than the iPhone 5, which is selling faster than any other model.

    Apple just has to get some more models to choose from with a bigger screen to attract that end of the spectrum, but also adding China Mobil will be their breakout moment.

  • Report this Comment On March 07, 2013, at 12:03 AM, blueofblue wrote:

    To Gandal: simply u cant afford AAPL lol

  • Report this Comment On March 07, 2013, at 12:08 AM, PaulApp wrote:

    No one has made Smartphone as a desired working device for workplace! Blackberry has came close, but lost the touch! Apple has came nearer but lost in integration of other work environment specification.

  • Report this Comment On March 07, 2013, at 12:38 AM, theman2013 wrote:

    to blueofblue. that's why you don;t make money....you don't buy stocks because you afford them or not. You buy them because they are cheap

  • Report this Comment On March 07, 2013, at 1:11 AM, TimKnows wrote:

    You would be crazy paying $ 360 for AAPL, they have nothing to offer for all of 2013, imagine the price of the stock if the general market wasn't at record all-time highs. Let's count our blessings if it can hold $ 300 something by the end of this year.

  • Report this Comment On March 07, 2013, at 1:43 AM, tedwilliams882 wrote:

    I love how silly people can be. If you include the cash hoard of $140 BILLION DOLLARS, AAPL is currently selling for about $290 per share, or under 7X earnings - < 1/2 of what you'll pay for MSFT. Samsung is its only real phone competitor, and understand that they're focused on making all kinds of junk, like the Microwave I have with the door I've I had to replace twice because the handle keep breaking off. Yes - people will buy crappy phones, but don't tell me that Samsung can come close to competing with the elegence, style and awesomeness of AAPL. FYI - go try to buy some Samsung stock if you want lol. And - if you don't think the IWatch won't be a money making machine - you got another thing coming. AAPL will make a MINT selling them.

  • Report this Comment On March 07, 2013, at 1:45 AM, SimchaStein wrote:

    800 to 360 - lol

  • Report this Comment On March 07, 2013, at 1:50 AM, strelna wrote:

    The takeaway here is that Eric Bleeker, CFA, has no position in AAPL.

  • Report this Comment On March 07, 2013, at 2:13 AM, thethreestooges wrote:

    Many corporations and academics are switching to iPads and iPhones. Window8 stalled. Every Kindle Fire Amazon sell lost money. Andriods too fragmented for Corporations. Watch out for the iTsunami....Who care if AAPL not coming with new gadget. They have much more just trying to finish filling out the existing customer orders. Who can say that? Blackberry? HP? Dell? Google/ASUS? HAHAHA

  • Report this Comment On March 07, 2013, at 4:56 AM, cpemail wrote:

    300 now. by the end of the year more like 200.

  • Report this Comment On March 07, 2013, at 7:52 AM, butthead2u wrote:

    It's be at 200 shortly since Job's made the same big mistake twice. Instead of allowing multiple hardware manufactures focus on hardware and Apple focus on software he again left the door wide open for the propagation of others software (Google and Microsoft). He lost the computer wars in the 90's and he's going to lose the computer wars again.

    Yes folks, phone and tablets are just computers in different sizes. Microsoft is going to win again because they understand this, they've been saying it all along, Windows everywhere; phones, tablets, pc's, cars, xbox...they along with their partners are going to wow people with stuff like kinect. Dell wants to go private because he likely knows what's coming and the wealth that will come with it.

  • Report this Comment On March 07, 2013, at 8:23 AM, Gunner1223 wrote:

    AAPL $380 until we get some good news...

  • Report this Comment On March 07, 2013, at 9:28 AM, Morgana wrote:

    When does supplying a good product not make money? Did a"light bulb" flash?

  • Report this Comment On March 07, 2013, at 10:46 AM, byzeev wrote:

    Is AAPL now less innovative without Steve Jobs ? Was it really a single man brand, that now with him gone, has lack new ideas ?

    And also I would like to know if their OSx is doing so well, why not open it for 3rd party hardware. Eventually this what GOOGLE has accomplished with its Android/Linux open source. So why not change this and provide an end to end solution that enables end users safer, better and more reliable experience with home appliance and devices.

  • Report this Comment On March 07, 2013, at 11:09 AM, Nickroy187 wrote:

    Short AAPL and go BBRY ti'll it launches the Q10. All the bad news is mostly about stock shortage, but i say they are wrong. I live in Canada and called hundreds of stored and it's all the same thing; you just can't get the Z10 because they're out of stocks. Not because they're short, they had plenty (500 at some stores). For AAPL, well let's just say a huge company like that can't go bad for very long so i'd say near 340-380$ i'd clearly buy some.

  • Report this Comment On March 07, 2013, at 8:43 PM, MotleyDirtbags wrote:

    Apple has already started production of the iphone 5s. When it goes on sale later this summer/fall there won't be the line ups for the phone that Apple is used to getting. People are beginning to laugh at Apple and their phoney hype. The iphone 5 wasn't any better than the 4s and most people realize that. The 5s will be a big disappointment saleswise. Expect 380 soon, a recovery over the summer, and then plummets to 320 by the end of the year.

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