Please ensure Javascript is enabled for purposes of website accessibility

Apple Removed From Goldman Sachs' Conviction Buy List

By Evan Niu, CFA - Apr 2, 2013 at 4:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Less than two months after reiterating, Goldman Sachs is taking Apple off of its Conviction Buy list.

Goldman Sachs has removed Apple (AAPL 4.08%) from its Conviction Buy list, less than two months after reiterating the same rating in February. Analyst Bill Shope does not believe that the iPhone 5 has generated the levels of growth that investors were expecting, underscoring the importance of the next product launch.

Apple had been on the firm's Conviction Buy list since December 2010, and Goldman still rates the Mac maker a "buy." Shope reduced his price target on Apple from $660 to $575 to reflect lower estimates for fiscal 2013. The analyst now expects Apple to generate $190.3 billion in revenue in fiscal 2013, down from the previous estimate of $193.8 billion.

Shope expects the company to release an affordable iPhone to target emerging markets this year.

Like others, Shope believes that Apple will soon announce a way to use its massive cash pile for the benefit of shareholders. If the company announces a substantial dividend increase or a stock buyback, it could provide "a healthy floor" for the stock price, he said. Still, the analyst said that he believes the stock's outperformance over the next 12 months "will be more closely tied to the timing and success of Apple's next batch of product refreshes."

Apple's stock fell $1.01, or 0.2 percent, to $427.90 in afternoon trading today, while the Nasdaq was up 0.2 percent. Apple's stock price is close to its one-year low of $419, hit a month ago. It's well off its all-time peak of $705.07, reached in September on the day the iPhone 5 went on sale.

The Associated Press contributed to this report.

link

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$149.64 (4.08%) $5.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.