After the excitement over the highs it reached on Monday, some analysts are expressing concern that Apple (NASDAQ:AAPL) may be overvalued. On Tuesday, research firm Oracle Investment Research downgraded the iPhone maker to a hold from a buy while cutting the company’s price target to $650 from $670.
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“The hype concerns us,” Oracle’s Laurence Balter wrote in a note to clients, comparing the Apple optimism to the frenzy when Microsoft (NASDAQ:MSFT) and Cisco (NASDAQ:CSCO) reached their respective peak market cap. Apple’s stock, which had hit a fresh all-time high of $674.88 in midday trading, started selling off after news of Balter’s downgrade circulated. Shares fell 1.34 percent to $656.22 at the close on Tuesday.
Balter said he was concerned expectations were too high, especially since a lot of Apple investors had pinned hopes on product launches that were only rumors. The analyst was especially concerned about the talk regarding the supposed new television from the company and the tough market Apple would have to endure if it were to launch such a product. “We believe entering the low margin world of television set top boxes and TV is fraught with margin danger,” Balter wrote. “And will the set top box go on top of the XBOX, next to the DVR or under the DVD Player? Is this the game changer we have all been waiting for?”
The analyst also mentioned that Warren Buffet had once quoted Herb Stein: “Anything that can’t go on forever…will end.”
Balter’s analysis contrasts sharply with Topeka Capital’s $1,111 price target and a trillion-dollar market cap for Apple.
Shares of Apple (NASDAQ:AAPL) closed higher 1.95 percent at $668.87 in Wednesday.
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