Apple Recap: Smaller Bull Case, Ample Cuts, Market Value Worries

Biggest PT Cut

Jefferies analyst Peter Misek was one of multiple analysts who came down harsh on Apple post earnings. He cut his rating on the stock from Buy to Hold and chopping his price target by as much as $300. “[The] slowdown in iPhone sales is real and material,” Misek wrote in a note to investors. “While management was somewhat evasive on the call, it appears that demand in the second half of the quarter and into [first calendar quarter] was much weaker than management or we expected.”

Misek added that Apple was losing the smartphone screen-size war and that the company’s high margins would now stay below 39 percent and trend lower because of growth concentration in the lower ends of the smartphone and tablet markets and shorter product cycles from rivals… (Read more)

Market Value Drop

With Apple’s stock plunging, there was another key figure that was rapidly losing value: its market cap. A year ago, on January 25, 2012, Apple’s stock-market value grew to $416.5 billion, beating out Exxon Mobil (NYSE:XOM) as the most valuable company in the world. However, with the stock consistently dropping in value since reaching those highs in September, the company’s market cap has been in danger of slipping down on the list as well. With the latest fall, at one point on Thursday, the gap between Apple and Exxon was down to only about $6.2 billion. Interestingly, Apple’s effective market cap is now just over three times the size of its cash reserves, which are worth $137 billion. That would imply that Apple’s other assets, including operations and brand are worth about $300 billion… (Read more)

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