Apple Inc. (NASDAQ:AAPL) maintains its positive analyst recommendation, with almost all the sampled analysts rating the stock with a Buy recommendation, Outperform, Overweight, or Strong Buy. However, the technology giant has seen a majority of these analysts cut down their target prices by significant margins, which has pulled the average price target down to just $740 per share. Nonetheless, a number of the analysts maintain their ambitious price targets of between $800 and $900, with Brian J. White of Topeka capital being the only outlier with his $1,111 price target.
Despite the drop in average price target for Apple, the iPhone maker boasts the highest average price target in terms of margin as compared to its peers. Apple's average PT of $740, equates to a premium of $225 per share as per closing price on Thursday, which is 44 percent up. Google Inc. (NASDAQ:GOOG) price target adds a premium of just 13 percent, when compared to yesterday's closing price, while Amazon.com Inc. (NASDAQ:AMZN) PT is 12 percent above its closing price. Search Engine giant, Google, maintains the highest average PT of about $800 per share.
On the other hand, AOL Inc. (NYSE:AOL) average price target is 39 percent above its Thursday closing price, while Microsoft Corporation (NASDAQ:MSFT) stands at 28 percent premium. Hewlett-Packard Company (NYSE:HPQ) price target is at a discount of 4 percent of yesterday's closing. Judging by these statistics, only AOL comes closer to the premium placed on Apple's Price target. The biggest concern is whether or not some of these ratings and price targets have factored in the most recent developments as far as Apple Inc. (NASDAQ:AAPL) is concerned.
For instance, Ed Zabinsky of ACI research rates Apple Inc. (NASDAQ:AAPL) at Sell with a price target of $270 per share, initiated on January 25, 2012. There is no doubt that this PT has contributed immensely toward lowering the average PT. Although, it could be argued that Topeka capital's $1,111, might have been as effective on the reverse. The most salient fact is that Topeka recently reiterated their rating. I am not sure about ACI research. While I do not take the sampled ratings and price targets for granted, I believe a sample factoring of the last three months ratings, reiterations, and price targets would have been more realistic.
Nonetheless, a closer look at the frequency distribution of the price target indicates that the mode lies at $750 per share, with seven analysts including Canaccord Genuity's Michael Walkley, cutting Apple's PT to $750.
Apple Inc. (NASDAQ:AAPL) stock hit a record high of $705 in late September, triggering a wave of price target increase from various analysts, a majority of whom have since cut down their targets. In one of our recent articles, we features a series of five analysts who reduced their Apple price targets. Some of these reductions have come as a result of supply chain constraint for iPhone and iPad devices as well as a recent management reshuffle by Tim Cook.
At the time of this writing, Apple Inc. (NASDAQ:AAPL) was trading at $512.51 per share, down $2.55, or 0.50 percent decline from yesterday's close.