Apple Inc. (NASDAQ:AAPL) is one of the most active stocks on the market in the last few weeks. As we reported here on ValueWalk, the share price hit an all time high price of $705.07 per share, only to drop in recent days to its current price of $680.07.
Analysts have shown differing opinions of the stock, with UBS reaffirming its “Buy” rating, while others are disappointed with the sales numbers, posted by iPhone 5. While analysts expected between 6 to 10 million iPhone 5 units to be sold, the company posted only 5 million in their report. This sharp decline from expectations has caused share price to slip noticeably.
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
Another factor to consider in the reduction of sales, is the lack of Google Inc (NASDAQ:GOOG) Maps for the new iOS 6 OS, and the complete failure of the Maps application introduced by Apple Inc. (NASDAQ:AAPL) as a replacement. We reported of how much criticism Apple received from competitors, such as Nokia Corporation (NYSE:NOK), and tech blogs, like Gizmodo, here.
While CBS News reports that Apple’s losses may have partially stemmed from the failed application, and reports of iPhone 5 units being damaged during shipping, they also point out that Apple was thought to be losing ground based on a supply chain issue. Foxconn, one of Apple’s biggest iPhone 5 suppliers, has had serious labor issues of late, which led to an all out riot at one Chinese plant, as we reported here. However, it’s safe to say that not all of the blame can be placed on suppliers, but rather, some of it must be caused by weaker than expected demand.
A final factor to be considered is the timing of Apple’s launch. The much hyped Galaxy 4S, from Samsung Electronics Co., Ltd. (LON:BC94), was well advertised, and highly anticipated. This is Apple’s Inc. (NASDAQ:AAPL) premier competitor in the smartphone and tablet industry, and it seems they may have had their finger a little closer to the public’s pulse point than Apple. Apple’s iPhone 5 was kept shrouded in mystery right up to the launch date, at least, as much as it possibly could be, considering all the leaked images and videos from Apple suppliers. This choice by Apple, to keep the new device cloaked and under wraps, may have hurt them in the initial sales figures. Also, they launched the product 11 months after their previous launch, which leaves many consumers still waiting for their upgrade cycle to come around to obtain the new device. Perhaps the timing should have been a little better.
On the other side of the equation, UBS still believes Apple Inc. (NASDAQ:AAPL) to be a good investment, and have reaffirmed their “Buy” rating for the company. They have set Apple’s target price at $780 per share, approximately $100 more than its trading price at the time of this writing. While this is a far cry from Gene Munster’s earlier predicted price of $900 per share, it seems that other groups besides UBS AG (NYSE:UBS) have their own opinions of the stock’s ability to climb.
Jeffries Group has maintained a “Buy” rating on Apple as well, and has raised the price target to equal Gene Munster’s at $900 per share. BMO Capital Markets has stuck by their “Out Perform” rating, as per a research note sent out to investors on Monday. According to DailyPolitical.com, they now have a $750 price tag set for a target. A third firm with faith in Apple Inc. (NASDAQ:AAPL) is Topeka Capital, which also stuck by their “Buy” rating, and according to a research note, they believe Apple will hit an $1,111.00 price target.
So, who is right? Are the analysts who are saying that Apple will soon reach $1,000 or more per share “in the know”? Or, could it be that everyone has higher expectations for the tech giant, than are feasible to reach, and the stock will continue sliding? My personal opinion is that Apple Inc. (NASDAQ:AAPL) will rally from its minor slide, and will continue its climb to new heights, albeit at a slower pace than it has in recent weeks. Let us know what you think.