How Apple Just Took Control

Between September and April, there was an overwhelming cloud of negativity surrounding Apple (NASDAQ: AAPL  ) ; shares plunged for months on end. Investors focused solely on the bad, while wholly ignoring the good. Competition from Samsung has been escalating. Margins were facing a tough comparison to 2012 results. Apple's unreasonable cash position kept getting more unreasonable.

These are all valid gripes, but shareholders were still throwing the iPhone out with the bath water. The negativity has seemingly come to an end following Apple's last earnings release, in part because the company addressed the criticisms over its capital allocation program. I'm not the only one who thinks that Apple just changed the conversation.

Word on the Street
Barclays analyst Ben Reitzes was out this morning with a bullish note, reiterating an "overweight" rating while boosting his price target from $465 to $525. The analyst is encouraged by the healthy rally that Apple has maintained since earnings, downplaying some of the longer-term margin concerns. Gross margin last quarter took a big hit from depreciation and warranty accruals, the latter of which is a temporary hurdle.

More importantly, Reitzes believes that Apple is now "taking control of the narrative" following months of pessimism. Immediately after earnings, Apple set official dates for its Worldwide Developers Conference, which will highlight new software and services. It's been a dry spell between Apple product announcements, but the WWDC opening keynote is now on the horizon.

The analyst believes that WWDC has numerous potential catalysts in store. Apple could detail a new mobile payments solution to leverage its 500 million active iTunes accounts, unveil an iRadio music streaming service, or further beef up iCloud and Siri. The WWDC announcement should satiate investors and consumers until "this fall," when Apple is expecting to show off new hardware to integrate with those software and services.

Apple loves to control things, and it just took control of its news flow for the better.

Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.


Read/Post Comments (3) | Recommend This Article (6)

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 May 06, 2013, at 10:55 PM, twolf2919 wrote:

    "Apple is taking control of the narrative" - what a bunch of horse manure! Apple isn't doing anything different than what it has been for months/years. That "analyst" at Barclay's is simply doing what all these shills do when their predictions don't pan out: adjust their predictions - hopefully without someone noticing.

  • Report this Comment On May 08, 2013, at 3:27 PM, Gaeseki wrote:

    >>>Apple could detail a new mobile payments solution to leverage its 500 million active iTunes accounts,---- Apple has a history of cranking out revolutionary products... <<<

    What an ignorant drooling moran!

    So when Apple comes up with 3 year old NFC or moving the head phone jack from top to the bottom or a new colored case, it is called a "revolutionary product". and when Samsung Really revolutionizes the way we interact with a phone(GalaxyS4's Sci-Fi Air Gestures, Eye track), it is called a gimmicks.

    What a bunch of lying crooks ~~~NFC was introduced in Galaxy devices long ago already thus its not a new mobile payments solution !

  • Report this Comment On May 09, 2013, at 12:09 AM, DEEPAKM2012 wrote:

    Gaeski,

    You are a crooked samsung troller. Do you get paid my them in cents or pennies for writing such comments.... It is really pathetic to see such comments.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2411484, ~/Articles/ArticleHandler.aspx, 12/18/2014 11:13:31 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