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NEW YORK ( TheStreet) -- The analysts think way too linear, which means that sometimes they get it wrong, Jim Cramer said on "Mad Money" Monday regarding Apple (AAPL - Get Report), a stock he owns for his charitable trust,
Cramer explained that analysts tend to think in cold, hard, easy-to-understand numbers. They calculate what they feel a company can earn, divide that by the share count, then determine a multiple investors should be willing to pay for those earnings per share. But for many companies, using an analytical approach just doesn't work. According to the analysts, Apple simply had no innovation left, and couldn't possibly produce a product that would wow consumers as the first iPhone or iPad did.
That's why when Apple debuted its new iPhones earlier this month, the analysts were quick to not only pan the product, but also lower estimates and downgrade the stock every chance they got.But then the iPhone launched to rave reviews, and Apple announced that it sold a record nine million units in just the first three days. The worries over the iPhones features, its pricing and its suitability for the global market, it seems, were just plain wrong. So now the opposite is true: The estimates for Apple are too low and analysts will be forced to raise estimates. Those upgrades will only continue to propel shares higher, back to the levels they probably should've been all along, Cramer said.