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Apple Inc. (NASDAQ:AAPL) has attracted a series of declining optimism from analysts and investors with a sequence of price target reductions. This has pushed the company’s price target down to an average of $740 per share as reported in one of our recent articles. Interestingly, Apple’s stock remains the cheapest among rivals in the technology industry.

Nonetheless, Apple Inc. (NASDAQ:AAPL) as we know it, is better judged per its historical performance, rather than industry comparisons. Investors are of the opinion that Apple’s iPhone sales will flatten during the current campaign (2013) as compared to its high levels of growth rates year-over-year. Therefore, a majority of analysts have cut down their expectations for the iPhone maker something that Barclays analysts have rightly pointed to be rare.

In a report published Sunday, Barclays Equity Research analysts Ben A. Reitzes, Ryan Jones and Matthew Markezin-Press reiterated Apple Inc. (NASDAQ:AAPL) stock at overweight, but cut their price target by 8 percent from $800 to $740. The analysts also reiterated the industry rating at Neutral.

This confirms that Apple has a whopping outlook, despite neutral outlook on the industry. The analysts revised upwards Apple’s December results estimates, just like the majority of the analysts have done in the recent past but reduced the long-term estimates, the latter being the definitive factors for cutting their price target.

In the report, the analysts wrote, “we believe that Apple is in a rare situation, in CY13. Expectations are actually low and getting lower. We believe that many investors fear iPhone sales will be relatively flat this year and that there will be no move into TV that moves the needle. We believe it is prudent to temper C1H13 expectations as Apple Inc. (NASDAQ:AAPL) readies new products and services to be launched in the Spring and through mid-year. We believe that iPhone sales can still grow by around 20% for a few years. Given lower estimates, our new price target for Apple is $740 as we believe that Apple can continue to be a leader in disruptive mobility and shares are attractive at current levels”.

The analysts pointed out that despite the hype being placed on Apple’s hardware development, it is it’s web services that are likely to spur its growth during the current campaign. The analysts are of the opinion that Apple needs to improve on its next iOS, dubbed iOS 7, by adding market competitive features. Specifically, the analysts believe that Apple needs to take giant steps into payments, an integrated iOS-led television service and improvements to iCloud.

The analysts raised the December estimates increasing EPS from $13 per share to $13.38, while revenue estimate for the period is now up from $52.4 billion to $54 billion. However, the long term estimates were cut down, with FY13 EPS down to $49 from $50.92, and revenues estimates are down to $194.8 billion from $196.1 billion. The FY14 estimates were also cut down with EPS now expected to be $57.45 from the initial $60.66 and a revenue of $221.4 billion from $230.9 billion.

The 2013 revenue is expected to grow by 25 percent year-over-year, while FY2013 revenues will increase by 14 percent from 2013, representing a declining growth rate. The analysts believe that Apple stands a better chance of restoring investor confidence in the company’s customer affiliation to iOS products. Apple Inc. (NASDAQ:AAPL) could prove to investors that switching costs remain high by improving on its web services.

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