This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Hits Another High, Shrugs Off Downgrade

Stocks in this article: AAPL

CUPERTINO, Calif. ( TheStreet) -- Apple (AAPL - Get Report) shares hit yet another new high on Monday despite the iPhone maker being hit with a rare downgrade.

The tech giant's stock peaked at $639.83 during afternoon trading, before retreating slightly to $639.29, up 1%, on volume of 17.6 million.

Apple was downgraded by BTIG on Monday

Apple's new high, however, came hot on the heels of an analyst downgrade, with BTIG Research warning that the company's telecom partners may rein in their generous iPhone subsidies.

"We believe that investors should take a breather during the expected strength of this quarter and the rapid rise in the stock," explained BTIG analyst Walter Piecyk, citing changing dynamics in the wireless industry. "We expect post-paid wireless operators to remain firm in their plan to stunt the pace of phone upgrades in 2012 and we expect to see some initial evidence of their success in the current quarter."

The frequent upgrades of iPhone customers, according to BTIG, have squeezed wireless operator margins.

"Operators, unwilling to stall the pace of Average Revenue Per Unit (ARPU) growth, offered generous upgrade policies including some that enabled a fully subsidized phone upgrade only one year in to a two year contract," explained Piecyk. "We expect those policies to change as the faster upgrade rate of smartphones compared to legacy feature phones has been a costly surprise to post-paid and pre-paid operators."

Analyst sentiment towards Apple has been overwhelmingly positive recently, with a slew of firms raising their price targets for the tech giant. Boosted by strong first-quarter results and a successful iPad launch, Apple's stock has risen more than 57% this year, compared to the Nasdaq's more modest 17.16% increase.

Apple also sold a record 37 million iPhones during its recent fiscal first quarter, up from 16.2 million in the same period last year.

Despite its downgrade on Monday, BTIG expects a blowout second quarter from Apple, projecting revenue of $40 billion and earnings of $10.75 a share. Analysts surveyed by Thomson Reuters are looking for sales of $36.2 billion and earnings of $9.86 a share.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs