Analyst: Apple Worries Not Here to Stay

Sales of the iPhone 5 may turn out to be a bit of a letdown in the current quarter, but Apple (NASDAQ:AAPL) was doing fine as a stock and was set to receive several catalysts this year, according to Jefferies analyst Peter Misek. The analyst said he expected iPhone 5 builds to be around 35 million to 40 million in the first quarter of the current calendar year.

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“We thought this device [iPhone 5] would be the biggest seller of all time and in fact we think around 50 million units sold in [calendar] Q4, which would make it the biggest selling electronics product of all time in a quarter,” the analyst told CNBC’s Squawk on the Street. “But there were hopes that it would be better than that. There were hopes that in Q1 that sales would be flat and instead what we’re getting is a seasonal type decline in Q1.”

But Misek added that Apple had only been cutting down on production of components of its newest smartphone as supplies stabilized with demand and that new reports regarding the cuts were immaterial. “It doesn’t change anything,” Misek said. “We think all of these cuts happened in around mid-December.”

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Several new product launches and a possible deal with China Mobile (NYSE:CHL) will help Apple this year, according to Misek, who has a $800 price target on the stock. A deal with China Mobile was not included in this price target, he added. According to the analyst, with approximately $50 in earnings per share this year and cash funds of $100 per share, Apple will have a significantly higher amount of cash by the end of next year. “So what you are doing is you are actually buying a stock that effectively is $400 and we think at $50 earnings for the year that it is a cheap valuation,” he said.

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