Analysts Lightening Up on Apple, Mostly... iPad3 Looming (AAPL, HPQ, INTC)

Consumer Electronics

Published: June 21, 2011 7:55 am

Last Updated: June 21, 2011 7:56 am

Apple Inc. (NASDAQ: AAPL) has been in trouble as a stock since it broke under its 200-day moving average last week. Actually, it has been in trouble for a while. Analysts have mildly started downgrading the stock and this week came a new concern from Zacks and another research call. You have heard us coin the phrase Consumer Lemmingism toward Apple if you have read our site for some time. Now Apple may have yet figured out a way to turn its customers into lemmings all over agin… The iPad3.

The Economic Times of Taiwan reported the iPad3 will hit stores as soon as this coming September. This is way ahead of an expected launch date of March 2012 and is rumored to have about six-times the screen resolution over iPad2 and should come with some 3D capabilities. PCMag.com also keyed on pressure from movie studios to cash in on Apple’s growth.

This morning came a report from Oppenheimer that it was maintaining an Outperform rating but it was trimming its objective price target to $420 from $450 over the next year.

With Hewlett-Packard Company (NYSE: HPQ) set for July 1, 2011 as its tablet date, with Intel Corporation (NASDAQ: INTC) and its coming Ultrabooks, the pressure is on. Our take, how many generations of one product can a company release in a short period of time. iPad is effectively only a year old and there has already been the iPad2 on the shelves. Now iPad3? Those Fanboys who just buy it to upgrade only send the message even more that it is OK to be bilked.

Zacks has some concerns here but does call Apple “a great company with a loyal customer base, international expansion, competitive pricing strategy and a solid cash position.” It even remains positive on Apple’s long-term growth. That does not mean bad news is not coming. Zacks notes increased competition in most major product segments, possible product launch delays, rising operating costs, and increasing “legal complexities”…

As a result, Zacks maintained a Neutral rating over the long term for the next six to twelve months, and the rating is a Zacks #3 Rank that implies a near-term Hold rating.

TheStreet.com has also noted that Morningstar added it to the 5-Star highest ranking with a fair-value target of $475 on the stock.

Now that the trajectory has been interrupted in Apple, expect more and more analyst “tweaks” in the coming days and weeks.

JON C. OGG

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