Apple Recap: New iPad, Damp Squib, High Hopes

Apple (NASDAQ:AAPL) rose 1.88 percent on Tuesday to $458.27 after announcing the launch of a brand new iPad. Here are the top stories that affected the stock on the day:

Apple’s Latest iPad

Apple quietly added a new tablet to its lineup on Tuesday, announcing the launch of a 128GB version of the fourth-generation iPad. The latest unit, which doubles the storage capacity of the largest iPad model currently in the market, will be available in both Wi-Fi-only and cellular capabilities. It goes on sale on February 5. The fourth generation of Apple’s full-sized, or 9.7-inch, iPad lineup now has four different capacities, starting at 16GB for the entry-level model. The iPad mini still offers 64GB as the maximum capacity. The new model has all the features of its other fourth-generation cousins, including a 9.7-inch Retina display, FaceTime HD camera, and an A6X processor. The high price tags of $799 for the WiFi-only version and $929 for the one with added cellular functionality will definitely relieve some worries about the company’s falling gross margins… (Read more)

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Cramer Isn’t Impressed

Investment specialist Jim Cramer said on CNBC that the newly launched iPad was neither a very coveted product nor likely to provide Apple’s stock the momentum it needed right now. “I’m sure this is a good product, but I know I don’t need one,” he said. “I think it’s great they have a new product. GE (NYSE:GE) probably has some new products, too.”

According to Cramer, Apple needed something more solid to spark its sagging share price. “This is an incremental positive in a stock that doesn’t need an incremental positive,” Cramer said. “The stock needs more. I’m looking for new dividends, new buybacks, and new breakout products — this is not it.”… (Read more)

Crushing High Hopes

Bernstein Research analyst Toni Sacconaghi said second half estimates for Apple, particularly those for the June quarter, were “too high” and hurting the company. The analyst was specifically concerned about the fact that Wall Street consensus figures were “forecasting a 1 percent sequential decline in iPhones in [the fiscal third quarter], which [was] historically unprecedented in the absence of a new device – which we would not hold our breath for (at least at this point).”
Sacconaghi, who has an Outperform rating on Apple’s stock along with a $725 price target, has projected revenue of $35.7 billion and earnings of $8.52 per share in the third quarter. In addition, the expectations of a new product launch prior to June were almost unrealistic, he said. Sacconaghi was also worried about Apple’s announcement that it was changing its way of forecasting earnings… (Read more)