Sacconaghi Hopeful for the Future of Apple
Determining the future of Apple (NASDAQ:AAPL) is getting more and more difficult as the tech company pushes into new markets and diversifies (read: complicates) its supply chain, some analysts say. However, CNBC’s “Fast Money” trader Toni Sacconaghi of Sanford Bernstein is betting that Apple’s quarterly earnings, to be released later this afternoon, will exceed expectations. His price target for the stock is $750, with a rating of “Outperform.”
“Fifty-two million iPhones or above would be considered a blow-out, and that would be very favorably viewed,” he says, advising investors to especially keep an eye on the company’s gross margins and iPhone sales numbers. “I think 46 or less would certainly be considered disappointing, and then it’s kind of your call on where it comes in between that range.”
“Sentiment is extremely powerful,” Sacconaghi said on Tuesday, observing that reports of iPhone component order cuts were influencing investors’ perspectives of the stock. “The fear of numbers going down is what’s making this shareholder base at Apple want to sell the stock.”
Component orders are more difficult to track these days because the company is using new suppliers in different geographical areas, and there’s also competition to consider, namely Samsung (SSNLF.PK), whose shares rose to 31.3 percent in the third quarter of 2012. Rivals Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) will also be reporting this week.
Last Friday, Apple’s stock closed at $500, its lowest price in 11 months, down 29 percent from its September closing high of $702.10. According to Thomson Reuters, the general analyst consensus is that revenue will increase 18 percent to $54.7 billion from last year, but net income will fall 2 percent to $12.78 billion.
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