Is Apple Sell-Off Based On Misleading Reports?

Reports on Monday that Apple (NASDAQ:AAPL) had cut orders for iPhone 5 components after lowered demand took the company’s shares down, but according to UBS, there was nothing new in the news to spark worry. Analyst Steve Milunovich wrote in a research note that there had been no change in component orders since a cut by his firm last month. While the research team had reduced its iPhone quarterly sales forecast last month, it did not see the need to take a fresh look at numbers now.

Should you buy or sell Apple’s stock ahead of earnings in a few days? Our 20-page proprietary analysis will help you save time and make money. Click here to get your SPECIAL REPORT now.

“It appears this is old news — our analysts indicate no changes since,” the analyst wrote on Monday. “In December, we reduced our iPhone 5 estimates by 5 million a quarter due to the 30 percent production cut being reported out of Asia. At that time, our analysts estimated that March quarter iPhone 5 production would be 25-30 million and 4/4S 3-5 million. How much of the reduction was a result of inventory rebalancing vs. lower demand was unclear, but the cut was greater than seasonal so we took the conservative route.”

About 45 million iPhone units should have been sold in the December quarter, according to Milunovich, who added that there was even potential for upside.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Click here for our fresh Feature Stock Pick now!

Apple shares were caught in “a battle between peaking growth and margins and a low valuation,” the UBS analyst said. “Momentum tends to win out in tech,” he added, though cautioned investors that the stock could remain under pressure. Milunovich noted that the stock was trading at just eight times forward earnings and chose to keep his Buy rating and a $700 price target on it.

Don’t Miss: What’s Behind Apple’s Torrid Start to the Day?