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 (AAPL -1.15%) 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:

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.