Analyst Calls on Apple Stay Positive as Shares Drop

By Douglas A. McIntyre Updated Jan 13, 9:38AM EST · Published May 10, 10:00AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Analyst Calls on Apple Stay Positive as Shares Drop — © Thinkstock

[cnxvideo id=”620993″ placement=”ros”]Deep trouble at Apple Inc. (NASDAQ: AAPL) has not stopped a large number of analysts who still support the stock and have even given it Strong Buy and Outperform ratings. And a number have price targets well above the $93 current share price.

The value of Apple’s stock has been relentlessly down since it posted earnings. As a matter of fact, shares have reached a two-year low. In the past month, the broader market has been flat. Apple’s shares have dropped 15%, wiping out almost $100 billion in market cap.

The median analyst rating on Apple is 1.9, according to Yahoo! Finance, which uses data from Thomson/First Call. On the scale a 1 is a “strong buy” and a 5 represents “sell.” The number of analysts in the pool used for the analysis is 27.

Yahoo! data show only one downgrade since the start of the year, although its database does not include every analyst action. The downgrade was in early January, when Rosenblatt cut its call from Buy to Neutral.
[recirclink id=329972]

24/7 Wall St. did highlight that many analysts maintained positive ratings while trimming price targets after earnings. We tracked full calls from BofA Merrill Lynch, Piper Jaffray, Credit Suisse, Goldman Sachs, Oppenheimer, Wells Fargo and more than a dozen more calls with ratings or target changes.

Apple’s spectacular growth has ended for the time being. The only likely catalyst for improvement is the launch of the iPhone 7, probably in September. Until then, analysts think revenue and earnings per share (EPS) will fall. For the current quarter, the consensus forecast for revenue is a drop of 15% to $42.2 billion. EPS is expected to shrink from $1.85 to $1.39. For the full year, revenue is expected to fall 8% to $215.4 billion, while EPS drop from $9.22 to $8.28.

Forecasts for 2017 must drive the optimism among professional investors. Revenue is expected to rise from $214.4 billion to $226.7 billion. Hardly back to traditional growth, but a modest turnaround nevertheless. EPS are expected to rise from $8.28 to $9.12.

The forecasts may prove correct, or even conservative, unless the iPhone 7 is a bomb.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.