Early Apple Bear Turns Bullish on Apple

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One of the first analysts to to turn bearish on Apple last year, correctly predicting lower-than-expected revenues, has upgraded the stock to a Buy, giving it a 12-month target price of $540 against a closing yesterday of $428.35.

BTIG analyst Walter Piecyk is cited in Business Insider as suggesting that Apple's earnings per share will be flat or slightly down this year but will climb in 2014.

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He bases the potential growth on four factors: Apple will release a cheaper iPhone, carrier upgrade policies will make it easier for users to buy new iPhones, a new product will come out, and Apple will do something with its cash.

However, he also warns that Apple could miss analysts expectations this quarter, and might even miss its own guidance. That could crater the stock below $400 a share. But after that, he sees things smoothing out and improving for Apple.

The difficulty in forecasting future revenues in a company noted for secrecy around new product launches is acknowledged, but Piecyk includes an assumption that Apple will launch a new category that will generate $5 billion in revenues. Apple is widely assumed to be planning to launch both a smart watch and an HD TV.

Bears will note the absurdity of assuming that any company can simply come up with a $5 billion product while Bulls will call it an overly conservative rounding error for a company generating $200 billion in revenue and which has beaten consensus revenue estimates by billions of dollars in recent years. Both arguments are valid and the harsh criticisms will be merited.

Top Rated Comments

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96 months ago
I'm all in if it drops to $400. Been wanting this stock for a while.
Score: 3 Votes (Like | Disagree)
Avatar
96 months ago

... The difficulty in forecasting future revenues in a company noted for secrecy around new product launches is acknowledged ...


There. Someone finally admitted it. Apple just doesn't tell anybody what they're working on.
Therefore, analysts are forced to make up even more stuff than normal when they "forecast" apple.

Oh, and by the way, female analysts are 7.3% more accurate than male analysts.
The women, apparently, are more concerned with being correct.
The men, apparently, are more concerned with competing against each other.

http://www2.mccombs.utexas.edu/Faculty/Alok.Kumar/FemaleAnalystsJAR.pdf (http://www2.mccombs.utexas.edu/Faculty/Alok.Kumar/FemaleAnalystsJAR.pdf)

http://ideas.repec.org/a/bla/joares/v48y2010i2p393-435.html (http://ideas.repec.org/a/bla/joares/v48y2010i2p393-435.html)

http://www.techrepublic.com/whitepapers/self-selection-and-the-forecasting-abilities-of-female-equity-analysts/1903609 (http://www.techrepublic.com/whitepapers/self-selection-and-the-forecasting-abilities-of-female-equity-analysts/1903609)


... He bases the potential growth on four factors: Apple will release a cheaper iPhone, carrier upgrade policies will make it easier for users to buy new iPhones, a new product will come out, and Apple will do something with its cash.


Yup. Those are all important. But a deal with China Mobile is more important.
Score: 2 Votes (Like | Disagree)
Avatar
95 months ago

(...)

Oh, and by the way, female analysts are 7.3% more accurate than male analysts.
The women, apparently, are more concerned with being correct.
The men, apparently, are more concerned with competing against each other.

(...)


Well, if only we could restrict that comment to analysts...
Men seem to always (or at least 99.9% of the time) be more concerned with competing against each other, leaving the difficult task of being correct to the women!
Couldn't we just hand them (women) the world already? :D

P.S.: no irony here, I'm being dead serious...
Score: 1 Votes (Like | Disagree)
Avatar
96 months ago

I was just thinking the same thing... I've never owned any stock before though, and I'm 40k in debt from school, so making a risky decision like this is probably a bad idea...


They always say don't buy stocks if you can't afford to lose. Sounds like you can't afford to lose. I know somebody who bought at 550 and is ticked.
Score: 1 Votes (Like | Disagree)
Avatar
96 months ago

BTIG analyst Walter Piecyk is cited in Business Insider (http://www.businessinsider.com/btig-upgrades-apple-to-a-buy-2013-3) as suggesting that Apple's earnings per share will be flat or slightly down this year but will climb in 2014.

I do not see, why they should climb in 2014. Apples current strategy is: Zero innovation, more restrictions in the OS-platforms, and so on.
Score: 1 Votes (Like | Disagree)
Avatar
96 months ago

I was just thinking the same thing... I've never owned any stock before though, and I'm 40k in debt from school, so making a risky decision like this is probably a bad idea...


Can't go wrong with Apple. I still think it'll shoot up once it hits its absolute bottom.
Score: 1 Votes (Like | Disagree)

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