Apple’s (NASDAQ:AAPL) under-performance over the past few days has left even some hardened investors shaken. The stock is now more than 22 percent down from its peaks of mid-September when the company’s world looked so rosy when viewed next to the sixth-generation iPhone. But the share price dropped on news of top management changes, it dropped on supply issues of new products, and it dropped further as investors began selling in anticipation of the fiscal cliff, which will bring tax hikes in tow.
However, RBC Capital analyst Amit Daryanani is sticking with the dipping stock, reiterating his Outperform rating and a $750 price target. Apple closed Wednesday down 1.11 percent at $536.88.
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Daryanani dealt with several of the concerns that have plagued the company’s share price over the last few days in his note to investors, starting on an optimistic note with the likelihood of a full-fledged high-definition television set from Apple. The company may release an “iTV” that would “revolutionize the living room,” the investor wrote, adding that the device, if it were to be launched, would garner a 30 percent share of the TV market over the course of three to five years.
While supply constraints for the iPhone 5 and the iPad mini “are starting to ease up across the board,” the analyst added that the company’s projection of a gross margin drop of 36 percent this quarter “is more reflective of their conservative stance and transitory ramp headwinds vs. structural challenges.”
The analyst is certainly not worried about the departures of iOS chief Scott Forstall and retail head John Browett, saying simply that Apple had “navigated through past turnovers impeccably.”
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