Apple Gets Cut
With a more than 9 percent drop in after-hours trading on Wednesday night and a similarly vast plunge before markets opened on Thursday, investors have made very clear what they think of Apple’s (NASDAQ:AAPL) underwhelming earnings results. Most analysts covering the tech company also took stock of the situation and reacted in much the same way — with a palpable easing of confidence.
According to Reuters calculations, as many as 14 brokerage firms have announced trimmed price targets on the stock since the earnings came. The average cut was worth $142, taking the average price target on Apple to just under $600 at $599.
Among the key cuts was the one from ultra-bullish Brian White of Topeka Capital, whose high $1,111 target was shot down to $888. White had stayed firm on his industry-high number through the continuing fall in Apple’s share price starting mid-September, but the lackluster earnings report finally prompted him into action.
Other key firms announcing cuts included Barclays Capital, Mizuho Securities, Credit Suisse, Deutsche Bank, Raymond James, Jefferies & Co., Robert W. Baird & Co., and Canaccord Genuity.
Jefferies even downgraded its Buy rating on the stock to a Hold while slashing its share price target by a massive $300 to $500. Apple closed the trading day on Wednesday at $514, but that was before the earnings blaze hit.
Profit rose less than 1 percent to $13.1 billion, or $13.81 a share, for Apple in the holiday quarter for its slowest profit growth since 2003. Sales rose 18 percent to $54.5 billion, but saw their weakest increase in 14 quarters. Rising costs and a rapidly growing competition have made it harder and harder for Apple to maintain its big growth numbers of quarter past. While the company saw record iPad and iPhone sales, the rising costs of quick product overhauls in the face of worthy competitors, such as Samsung (SSNFL.PK), are beginning to show.
According to Reuters, Apple is now the lowest-ranked stock among the key tech firms in the country according to the Analysts Revision Model, which measures analysts’ revision of key indicators and changes to their ratings.
The iPhone maker’s current score of 10 out of a possible 100 compares to Google’s (NASDAQ:GOOG) 34, Microsoft’s (NASDAQ:MSFT) 19, Nokia’s (NYSE:NOK) 82, and Samsung’s 89. BlackBerry maker Research in Motion (NASDAQ:RIMM) has a perfect score of 100.
Investing Insights: AAPL Earnings: Cash Hoard Swells to New Record.