Apple Inc. (NASDAQ:AAPL) is up close to 3% since the start of 2013, and many investors hurt by the stock’s selloff last year are undoubtedly hoping that more gains are in store.
At Insider Monkey, we’ve covered a variety of bullish scenarios for the tech giant, the majority of which rely on a new device being introduced this year. Whether this product comes in the form of a low-cost iPhone (see Is Apple Planning a Low Cost, Larger iPhone?), or if it’s the much-anticipated smart TV (see Apple Inc. (NASDAQ:AAPL)’s ‘iTV’ Could Add $4.50 to EPS), there are a number of different positive growth drivers that can push shares higher.
Still, that doesn’t mean that there isn’t room for discussion amongst the bears as well. One investor in particular is Doug Kass, president and founder of Seabreeze Partners. Mr. Kass also contributes to TheStreet’s Real Money.
On CNBC earlier this week, Kass was on the air discussing Apple Inc. (NASDAQ:AAPL)’s prospects in 2013, which are particularly dim in his opinion. Here are some of his comments:
“One of my predictions last year – one of my good predictions – is that Apple would be a superior share price performer most of the year, and then in September it would fall down dramatically and obviously I got that right. I think this year, you see continuation of the weakness of the last three months, and that Apple’s earnings will be persistently reduced in the first half of 2013, under the competitive pressure of the Microsoft Surface, which obviously started up poorly but will gain traction in the middle of the year, Google’s Nexus, Amazon’s Kindle, et cetera.”
So, it appears that at least part of Kass’s argument against Apple’s investment prospects are increased competition in the tablet space, which is valid, but he also points to a situation that could wreak far more havoc on Apple Inc. (NASDAQ:AAPL).
Continue reading for the rest of his AAPL predictions…
Additionally, Kass also discussed that he believes “Apple’s earnings will come in at less than $40 a share.” Wall Street, on average, is expecting Apple Inc. (NASDAQ:AAPL) to finish FY2013 with an EPS of $48-$49, and the company did finish FY2012 with an EPS of $44.15.
One industry-specific factor that could affect Apple’s bottom line may be tax-related. Here’s what Kass had to say on the subject:
“I think also under pressure for Apple will be: Senator Levin has a sub-committee investigation on offshore tax havens, the results of which will be released in the next month or two, and this will underscore the fact that Apple and many tech companies have tax-avoidance strategies, which are hurting the budget deficit.”
When asked to specify his target price on Apple Inc. (NASDAQ:AAPL), Kass stated: “I think the stock will spend most of the first six months [of 2013] under $550 a share; I think $450 is reach.”
While we can only wait and see what the future will bring for the Cupertino-based tech giant, it’s refreshing to hear a bit of a different opinion than the typical Apple analyses. Kass makes a very good point about possible pressures from Washington, which can obviously throw a kink in any potential earnings growth that the company experiences from its product releases.
Let us know your thoughts in the comments section below, and for more Apple Inc. (NASDAQ:AAPL) coverage, continue reading here:
Disclosure: I have no positions in any of the stocks mentioned above