Tough Times Continue for Apple (AAPL)
NEW YORK (TheStreet) -- Apple (AAPL) - Get Report , one of the world's largest companies was severely bruised in the 2nd quarter as shares dropped 12% since its inception into the Dow, making it the worst performing stock since the addition.
In light of its recent struggles the Wall Street Journal reported yesterday that Apple has entered into negations with Jay-Z to acquire his music service Tidal, which owns exclusive rights to artists including Kanye West, Beyonce, Rihanna, and Daft Punk to give the company a spark.
Robert W Baird research analyst Will Power discussed the stock on CNBC's "Squawk Box" on Friday morning.
"Obviously it's been a tough performer." Power said, adding "the pace of innovation has slowed." This, coupled with customers becoming increasingly reluctant to upgrade their devices, have stalled the company's profits.
However, Power noted that though earnings have somewhat stalled, he does not see the same problems which threw other companies such as Nokia (NOK) and Blackberry (BBRY) to the wayside, which were newer innovations like the iPhone. Giving mention to the fact that while new, Apple products are not that enticing, however "We haven't seen it from anybody else" in terms of a competing device which could hinder Apple.
Power concluded by reiterating that Apple stock could still take a hit as long as earnings estimates remain at the current high rates. "We think not only the fiscal Q4 estimates are still too high but particularly the 2017 estimates. Until those get sufficiently reset it is going to be tough for the stock to work well."
Apple stock is trading higher by 0.06% to $95.66 early Friday morning.
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Separately, TheStreet Ratings rate APPLE INC as a "Buy" with a ratings score of "B." This is driven by a number of strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks TheStreet Ratings covers.
The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. TheStreet Ratings feels its strengths outweigh the fact that the company shows weak operating cash flow.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
You can view the full analysis from the report here: