Apple Inc. (NASDAQ:AAPL) share prices have plunged more than 20 percent from the September 19 peak of $705. Oppenheimer analyst Ittai Kidron believes that the recent weakness shows that now is the best time to purchase Apple Inc. (NASDAQ:AAPL) stock. For over a month, Apple Inc. (NASDAQ:AAPL) shares have come under significant pressure due to 1) weak consumer spending and poor macro environment, 2) Relatively higher pricing of iPad mini and loss of share in the tablet market, 3) management reshuffle, and 4) a decline in profit margins.
Certainly, Ittai Kidron didn’t ignore these challenges, because these are legitimate concerns. He still believes that the shares are overextended to the downside, due to too much pessimism regarding strategy execution. But Apple Inc. (NASDAQ:AAPL)’s competitive position hasn’t changed at all. Oppenheimer sees the consumer electronics giant heading into 2013 with a refreshed portfolio across key segments. A rather conservative guidance for the December quarter reflects an extensive product transition.
Many investors have been concerned over the looming dividend tax changes and uncertainty over the new capital gains tax policy. Oppenheimer says that it’s just a temporary phenomenon. Mr. Kidron believes that the sell-off is overdone, and the share prices should correct now. We will soon see an upside trend, as investors are reviewing good fundamentals in light of the sharp pull-back. The investors were panicked after Jeff Gundlach, of DoubleLine Capital, stated that Apple Inc. (NASDAQ:AAPL) stock may plummet to as low as $425 by early next year. And, the primary reason Gundlach cited for the decline in Apple share prices is “The death of Steve Jobs.”
Oppenheimer has maintained an Outperform rating, with a 12-month price target of $800. Yesterday, Apple Inc. (NASDAQ:AAPL) shares closed at $558 in Nasdaq trading. Mr. Kidron says he is bullish on iPhones, and he expects the company to launch a new, lower priced smartphone in the next five years. The iPad shipments are expected to be strong with consumers and enterprises. Mr. Kidron says the company has interesting growth opportunities, if it dives deeper into the consumer electronics market.