Apple being downgraded

Apr 3, 2010
15,814
2
0
Seattle, WA
#1
Surprise downgrade by BTIG on Apple. The detailed report is well done. Here is the news version of it: http://www.businessinsider.com/btig-downgrades-apple-2012-4

APPLE GETS DOWNGRADED: BTIG Forecasts A Big Revenue Miss Later This Year

Hats off to BTIG's Walter Piecyk for making a call that's almost never worked out for anyone ever: He has downgraded Apple from BUY to Neutral.

Here are the key points behind Piecyk's call:
First, Apple will have another blowout quarter. Revenue will be $40 billion for Q2 vs. current estimates of $36 billion. But that's where the good news ends.

2012 will be the year that the wireless carriers fight back against having their margins constantly squeezed.

Specifically, they say that new new policies (especially from AT&T) will stunt the pace of product upgrades, depriving Apple of sales.

Thus in Q3, there will be a sequential decline in iPhone sales, and revenue will come in $1 billion below current consensus.

Here's the crux of the call that fiscal Q3 will result in a big msis:
We expect quarterly upgrade rates to contract further in calendar Q2 (Appleʼs Fiscal Q3) based on typical wireless seasonal trends and likely increased speculation on the anticipation of a new iPhone in the second half of the year. Recall that investors were surprised by Appleʼs Fiscal Q3 results last year because of the slowdown in iPhone sales ahead of the expected launch of the iPhone 4S. We also do not expect a material broadening of market launches for the product like what was seen in the first calendar quarter. Specifically, we expect Appleʼs iPhone sales to drop to 27.5 million units in Fiscal Q3 resulting in a revenue estimate that is $1 billion below consensus. Investors have grown accustomed to upward revisions of revenue estimates by analysts after Apple reports strong quarterly reports.

As for AT&T, we have forecast that its upgrade rate will drop to 8% in Fiscal Q3 resulting in 3.25 million iPhones sold during the quarter, which is down from the 4.2 million phones we expect in Fiscal Q2 and the 7 million sold in Fiscal Q1. If AT&T customers start to expect a new iPhone in June or July, the upgrade rate could dip even lower. In 2011, the calendar Q3 upgrade rate fell to 7.5% ahead of the launch of the iPhone 4S. That is below our 8% estimate for Fiscal Q3. Also keep in mind that our estimate of total smartphones sold by AT&T of 26.7 million is above the 25 million in smartphone sales the company has cited in order to meet its 40% wireless EBITDA margin target and ability to grow earnings.

As for some other points:
There will be no Apple TV this year.
The iPad isn't that big of a deal. In 2011 the ipad generated less than 50% of iPhone revenue, and that gap will widen.
The Chinese market is promising, but ultimately it may be overrated for awhile given the price point of Apple products.
 

RogerD

Well-Known Member
May 23, 2010
3,442
101
63
BiggestLittleCity
#3
There was a article on AAPL's stock and big rise since the first of year yesterday. People are paying any price for call options on the stock ,watch for a top soon. I'm short btw,way too much bullishness and large percentage moves in short periods of time are always dangerous.

http://www.zerohedge.com/news/aapl-calls-lottery-ticket-effect-action
 
Last edited:

steve williams

Site Founder, Site Owner, Administrator
#5

RogerD

Well-Known Member
May 23, 2010
3,442
101
63
BiggestLittleCity
#7
Technically we have a triple 3 up which is a ending wave,very rare at this degree,being of cycle degree or larger.
 

Andre Marc

Member Sponsor
Mar 14, 2012
3,970
1
0
San Diego
www.avrev.com
#8
Market hammered

There is a good chance the market has been tanking due to computer based trading. Until regulators have the guts to take control, you will see 400 and 500 point swings based on headlines and market indicators which trigger trading algorithms.

Is anything really that different than last week?

The reason is europe i suppose , last month the banks in portugal borrowed at record levels from the ecb , totally borrowed by all banks 56 biljon a month , portugal will be next in the line i think

Where does that money all go???:D
 

steve williams

Site Founder, Site Owner, Administrator
#10
Well IMO the market has been down the past few days as I believe we are undergoing a short term correction with sell off of overbought stock
 

Andre Marc

Member Sponsor
Mar 14, 2012
3,970
1
0
San Diego
www.avrev.com
#11
That is the problem. NOBODY knows. The "markets" are a giant dark pool where much of our financial future is being manipulated by a small group of powerful entities. Just my opinion.

I dont know ,you could be right , maybe some rumours have been spread in the market over the weekend, the market was closed here yesterday
I dont follow it so well , i dont have positions right now , i was in last year for the big drop:D
 

Andre Marc

Member Sponsor
Mar 14, 2012
3,970
1
0
San Diego
www.avrev.com
#12
Well IMO the market has been down the past few days as I believe we are undergoing a short term correction with sell off of overbought stock
There is probably something to that. But I am a strong believer that automated trading, which, now accounts for 60% of all activity, is driving the volatility and it is immoral. It has not been addressed at this point because these high speed automated trades generate a lot of quick revenue for the trading houses and exchanges. Shameful.
 

Orb

New Member
Sep 8, 2010
3,010
0
0
#14
Personally I think he is about 18months early regarding a possible downgrade.
I must admit as I said in the $1 trillion market cap thread, I doubt Apple can do it, and any company touted to be able to do this ends up coming back down to earth.
There has been several companies in the past that were expected to hit that $1 trillion, and the markets are fickle to say the least.

That said, I think most of 2012 will be a good year for Apple, just that it is going to get much harder for them at the end of the year and from 2013 onwards when I feel it may start to lose its edge in comparison to some of the competitors.
But do not take my word, I am a fan of Intel (and seriously long term stability IBM) for the big tech companies :)
And invest in the really volatile London Aim stock exchange
So that probably says it all :)

Cheers
Orb
 

rblnr

Member Sponsor & WBF Founding Member
May 3, 2010
1,912
35
48
NYC/NJ
#15
Here's an alternate take by Jim Cramer of Mad Money:

http://m.cnbc.com/id/46999050

Frankly, if someone has a better stock pick at this moment, I'm all ears.
 

Orb

New Member
Sep 8, 2010
3,010
0
0
#16
More than Cramer, nearly every broker analysis has Apple as a strong buy, apart from that one I think Amir had the news link on.
And yeah I feel with 2012 Apple should do good.
One other benefit is that it was one of the stocks that was hardly affected in 2011 by the massive market slump due to government-soveriegn debt and growth concerns.
So hopefully this holds true again in 2012 if the euro starts to collapse for some countries such as Italy/Spain/Portugal.
But the one main rule; the markets are fickle and never expect it to do what you hope, been told, or want.

Cheers
Orb
 

rblnr

Member Sponsor & WBF Founding Member
May 3, 2010
1,912
35
48
NYC/NJ
#18
I think they've got tremendous momentum now, and there's no one at the moment with their ecosystem integration, and capacity for across the board top notch hardware design. The halo effect they'd always hoped for as really the only company who excels at both hardware and software finally exploded with the iPhone. Growth potential overseas looks great, and adoption rate of their products/ecosystem among the high school/college set is far higher than it used to be, so the pipeline into an ongoing consumer relationship with the younger set is far, far higher than it used to be. And it looks like they'll be pushing into new markets in the next year or so with TVs and other products.

Obviously I'm pretty bullish on Apple, and have been a shareholder for a long time, buying at various points. May well buy some more as you have, and think you will do well with it. The one thing I've learned to do with Apple is set a reasonable buy point below market and just wait -- with the volatility we have today in the market as a whole, and then all the rumor-mongering and so forth with Apple, I've found that such patience usually pays off. My other thing is to keep raising my stop loss to 25% or so below market to protect my downside. I do this with other stocks as well. Some analysts to look at btw are Andy Zaky at Bullish Cross and Horace Dediu at Asymco. They've consistently come closer with their earnings/sales projections on Apple than many of the established investment houses. I also find their analysis of various facets of Apple's business to be insightful.

Wish I could come up w/a stock I like better but haven't yet.
 

steve williams

Site Founder, Site Owner, Administrator
#19
I started buying Apple at $30/share years ago and watched the stock split and now where it is.
 

rblnr

Member Sponsor & WBF Founding Member
May 3, 2010
1,912
35
48
NYC/NJ
#20

About us

  • What’s Best Forum is THE forum for high end audio, product reviews, advice and sharing experiences on the best of everything else. A place where audiophiles and audio companies discuss existing and new audio products, music servers, music streamers and computer audio, digital to audio convertors (DACS), turntables, phono stages, cartridges, reel to reel, speakers, headphones, tube amplifiers and solid state amplification. Founded in 2010 What's Best Forum invites intelligent and courteous people of all interests and backgrounds to describe and discuss the best of everything. From beginners to life-long hobbyists to industry professionals we enjoy learning about new things and meeting new people and participating in spirited debates.

Quick Navigation

User Menu

Steve Williams
Site Founder | Site Owner | Administrator
Ron Resnick
Site Co-Owner | Administrator
Julian (The Fixer)
Website Build | Marketing Managersing