Apple Inc. (NASDAQ:AAPL) seems to be getting into more and more trouble with each passing day. The tumbling stock prices and lack of great new products have started taking a toll on employee morale, resulting in sheer brain drain. Yesterday, Jefferies analyst Peter Misek lowered his price target on the stock from $420 to $405 on Monday.
Apple Should Treat Employees Like Gods
Global Equities Research analyst Trip Chowdhry told Cadie Thompson of CNBC that if Apple Inc. (NASDAQ:AAPL) doesn’t resolve its employee retention problem, it will pose a serious threat to the iPhone maker. He said Apple Inc. (NASDAQ:AAPL) can’t turn around its stock price if the company can’t retain its people. The company should place its employees ahead of shareholders, said Trip Chowdhry. He said the company needs to treat its employees “like gods.”
Earlier this month, value investor Mohnish Pabrai took part in a Q&A session with William & Mary College students. Q3 2021 hedge fund letters, conferences and more Throughout the discussion, the hedge fund manager covered a range of topics, talking about his thoughts on valuation models, the key lessons every investor should know, and how Read More
After discussing the matter with recruiters at various tech conferences, Trip Chowdhry said that Apple employees see the falling stock price as a sign of a bleak future. They are leaving jobs to work at Facebook Inc (NASDAQ:FB), Google Inc (NASDAQ:GOOG), LinkedIn Corp (NYSE:LNKD) and even Hewlett-Packard Company (NYSE:HPQ).
Though Global Equities Research still maintains a price target of $650 on the stock, Chowdhry said he may revise the outlook after the company’s second quarter earnings report. He said if earnings are disastrous, and the company doesn’t talk about doing anything to retain its employees, then he is most likely to lower his estimates.
Gene Munster of Piper Jaffray has a similar view. He recently said that Apple Inc. (NASDAQ:AAPL)’s stock performance and employee morale are closely tied. However, Munster remains optimistic about the stock, saying that the upcoming product launches may restore the stock price and employee morale. Munster has a $655 price target on the stock with an Overweight rating. He expects the company to launch a low-cost iPhone this year, and an iWatch and a TV set next year.
Munster said that the morale is linked with the stock price. If the new products are what the Piper Jaffray analyst expects them to be, that will push the stock up. That will be good for employee morale as well. However, analysts believe that growth will remain sluggish over the next few quarters.
Apple Inc. (NASDAQ:AAPL) shares were down 0.20 percent to $401.74 at 3:15 PM EDT.