Apple’s Bulls vs. Bears: Who Is Right?
As I write this paragraph, Apple is up 2% on the same day that the S&P 500 is higher by only 0.5%. Supporting the stock at the start of Apple’s earnings week is yet another price target bump, this time published by JPMorgan analyst Samik Chatterjee. Even though Samik presented a neutral-to-bearish view on Apple in the short term, his long-term optimism seems to have been enough to encourage investors.
The past few days have witnessed an interesting bull vs. bear fight among Apple analysts. Unconditional “sell-side love” gave way to bearish comments issued late last week, which I believe were huge contributors to the stock price tumbling on Thursday and Friday.
Here is what bulls and bears have been saying about Apple ahead of earnings day.
- The early innings of the 5G cycle is not the right time to sell shares – The Street’s Jim Cramer
- There is still longer-term value linked to the group's services portfolio and the underappreciated leverage of the shift to “work from home” trends – JPMorgan’s Samik Chatterjee
- In China alone, between 60 million to 70 million iPhones are in the window of an upgrade opportunity over the next year with Apple going aggressively at all price points (SE, iPhone 12) to cement its installed base – Wedbush’s Dan Ives
- The proposition for consumers is compelling as the trade-in program meaningfully lowers the net purchase price of an iPhone. Apple gets the benefit of more competitively priced devices, which can help with user retention – Morgan Stanley’s Katy Huberty.
- A third quarter earnings beat, as well as the upswing from the coming 5G rollout, are already priced into the stock – JPMorgan’s Samik Chatterjee
- Apple may not provide guidance for the September quarter due to the pandemic uncertainties and the potentially delayed 5G iPhone release – Goldman Sachs’ Rod Hall
- If Apple provides guidance, it could fall below consensus for Q4 if coronavirus delays the release of the next-generation iPhone into October or later – Bernstein’s Toni Sacconaghi
- Next year’s earnings will fall below current expectations due to slowing unit sales, average prices, and unit growth – Goldman Sachs’ Rod Hall
What do you think?
I now hand the microphone over to the readers. What is your take on Apple? Would you side with the bulls or the bears on this one?
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(Disclaimers: the author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Apple Maven)