Prepare for an Apple Miss

Analyst sentiment over Apple (NASDAQ: AAPL  ) continues to get more pessimistic, particularly in the short term. Several Street analysts have recently predicted that the Mac maker is in store for a tough quarter, and that the company could potentially miss consensus estimates in the March quarter. Both Citigroup and BTIG Research have expressed such concerns.

The latest is Oppenheimer analyst Ittai Kidron, whose price target reduction from $600 to $550 is one of the headlines today that's holding back Apple shares, preventing them from enjoying an up day in the broader market.

Should Apple investors be worried?

Since Apple's rumored product pipeline constantly makes national headlines these days, consumers can be expected to delay some iPhone purchases leading up to the new models that are reportedly due out in June or July. That will put pressure on iPhone sales in the March quarter as well as the upcoming June quarter.

As a result, Oppenheimer is also dropping its estimates for those two quarters, but the silver lining is that it's boosting its forecast of September quarter sales. Kidron believes that despite the risk of a near-term miss, most of this pessimism appears already priced in to the stock considering its dirt cheap valuation.

Even if June guidance leaves a little to be desired, it would appear that investors aren't expecting much, as it isn't until the latter half of the year when more product upgrades are expected to reinvigorate sales. Apple continues to keep mum on its cash plans, which has widely been pegged as the next possible positive catalyst.

Upcoming "miss" notwithstanding, Oppenheimer remains largely bullish on the long-term business, and is keeping its outperform rating on the Mac maker. That also echoes BTIG Research analyst Walter Piecyk's sentiments, who upgraded Apple to "buy" alongside a $540 price target despite his similar concerns.

Even if Apple misses when it releases earnings next month, the big picture remains rock solid.

There is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (6) | Recommend This Article (16)

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 26, 2013, at 9:46 PM, Streakysky wrote:

    I sometimes - often - feel like these "informational" Mac articles are written by Samsung employees.

  • Report this Comment On March 27, 2013, at 12:16 AM, foolied wrote:

    Please stop this utter drivel cluttering up feeds! Previous article was listed "Is This the Beginning of Apple's Next Bull Run?". Pick a stance and stop flooding the market with unsubstantiated and dull reporting.

  • Report this Comment On March 29, 2013, at 5:19 PM, bretco wrote:

    "foolied" is kinda right, kinda wrong. There is no clarity whatsoever with Fool's Apple writings, maybe it is a great buy...oh wait, it is going to

    self-destruct.

    But wait.....isn't the entire market kinda like that,

    no one is exempt, bulls, bears, bluechips going south, pinkslip babies exploding upward...

    just use the conflicting Fool's advise to validate whatever your research and gut feelings say and if you are wrong, fool, blame it on Fool. If its a winner, pat yourself on the back.

    Fool on !

  • Report this Comment On March 29, 2013, at 8:01 PM, Khizhim wrote:

    @bretco:

    Bravo!

  • Report this Comment On March 30, 2013, at 12:34 AM, 2motley4words wrote:

    @bretco (and Khizhim): Ain't human nature (i.e., self-delusion---in the interest of self-preservation) a wonderful thing?

  • Report this Comment On March 31, 2013, at 3:48 PM, wjcoffman wrote:

    If you bought AAPL when Mr Jobs was involved then you need to re evaluate if it is still the same company, and if you'd buy them now. Quite possibly a different company now. I think the innovation is gone and combined with other companies replicating their business model I wouldn't buy them now. They MAY become a solid dividend paying company but since they don't mfr anything I'm not sure what they'll be paying dividends with other than the delta between what they pay in sub-poverty offshore wages and the markup. I'll be selling my meager, but substantial profit, shares soon.

Add your comment.

DocumentId: 2332710, ~/Articles/ArticleHandler.aspx, 4/18/2014 11:06:01 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement