What's the matter with Apple?
Once a stock market darling, the company seems to have wound up in Wall Street's doghouse.
Shares of the Cupertino, Calif., company have slumped more than 26% over the past three months as investors worried about a litany of woes -- both real and imagined. Writing on The Street, Jim Cramer noted that Apple has "become among the most hated stocks in the universe," which isn't overstating the situation. The latest problem depressing the stock price is China.
Last week, the media reports indicated that the debut of the iPhone 5 in the world's most populous country fell flat. The usually press shy Apple struck back at the naysayers and issued a statement over the weekend proclaiming that it sold 2 million iPhone 5s in China, the largest wireless market.
"Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," said Tim Cook, Apple’s CEO, in a statement.
Nonetheless, shares of Apple were down in early trading Monday because the China figures are not as impressive as they seem. The momentum in China is clearly going to rivals. Google's (GOOG) Android operating system controls more than 90% of the market, up 58.2% from a year earlier, according to Boy Genius Report.
China has about 1 billion wireless connections and is the world's largest market. Citigroup's Glen Yeung slashed his ratings on Apple to "neutral" from "buy" because "near-term supply-chain order cuts, while inconclusive, raise questions about iPhone 5’s strength, according to Bloomberg News. The stock was trading down Monday in early market action.
Wall Street has not thrown in the towel on Apple yet. The average 52-week price target on the stock is $754.02, about 47% higher than where it currently trades. Profit is expected to decline in the next two quarters, while revenue is expected to gain double-digit gains. Meanwhile, the drumbeat of bad news continues.
If Apple falls below $500, that would represent a decline of 27% since both the $702.10 peak price on Sept. 19 and the $705.07 intra-day high on Sept. 21. Shares of Apple are dirt cheap, trading at a price-to-earnings ratio of about 11, near its five-year low.
The stock has proven doubters wrong for years. Whether the company can continue to pull rabbits out of hats remains to be seen.
--Jonathan Berr does not own share of the listed stocks. Follow him on Twitter@jdberr.
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There is fundamentally NOTHING WRONG with Apple. The only thing wrong is the world of so-called experts all trying to second every minute detail of everything that Apple does or doesn't do. Like any other company, Apple has, does and will continue to make mistakes - but nothing that has or is happening with the Cupertino company justifies the knee-jerk reaction that it afflicting it. I constantly read that Apple is the "sweetheart of Wall Street". What a crock. The Street has always gone out of its way to find something, anything, wrong with Apple and then to magnify the magnitude of how they slid in to oblivion.
If Tim Cook's fart smells just a touch off - oh my God - sell, sell, selll - the end of Apple has arrived.
Come on people - wake up and smell the semi-conductors. Stop over-celebrating the good and above-all stop pannicking the "bad". This is the ebb and flow of business and not every single secondof every minute, hour or day is going to knock your socks off. What we now have however, is nowhere near a reflection of Apple is about, what it has achieved or where it is going.
edit: Mac book Air, New I-Mac, Apple TV and Airport Express with Air tunes, All phones are Iphone 4s and one I-Pad
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