Wall Street’s Apple Inc. (AAPL) Analysts Are ‘Out of Whack’: Study

Apple Inc. (NASDAQ:AAPL) has the greatest amount of analyst coverage on Wall Street; that’s no secret. What you may not know, though, is just how off analysts’ price targets have been in regard to the stock’s performance in recent months.

Apple Inc. (AAPL)Credit: Philip Elmer-DeWitt, Apple 2.o/Fortune

As seen above, a particularly illuminating graph by Philip Elmer-DeWitt over at Fortune‘s Apple 2.0 section indicates that the differential between the average analyst price target and Apple Inc. (NASDAQ:AAPL)’s actual price is a whopping 44%. This gap is huge, far wider than those of Google and Microsoft, for example.

In Elmer-DeWitt’s analysis, he ardently mentions that “Analysts tend to get nervous when a stock they follow drifts too far from their published price target, and few stocks are as widely followed or as far out of whack as Apple.” That’s tough to argue with.

Even more interesting, though, is Wall Street’s average price target, which is $740, is actually below the sample’s mean price target around $800. The entire distribution of Apple Inc. (NASDAQ:AAPL)’s price targets can be seen below.

Apple Inc. (AAPL)Credit: Philip Elmer-DeWitt, Apple 2.o/Fortune

So how are Apple Inc. (NASDAQ:AAPL) analysts adjusting their views to fit with the stock’s latest selloff?

As Elmer-DeWitt indicates, “Eleven analysts lowered their Apple targets in the final weeks of the company’s first fiscal quarter of 2013, which ends Saturday,”adding that still, “30 of our 48 analysts expect Apple to hit somewhere between $700 and $800 before the end of 2013.”

In one of the most useful charts we’ve seen on this matter in quite some time, the author also provides a detailed chart of the Apple Inc. (NASDAQ:AAPL) price targets held by the 48 analysts polled by Fortune. The layout is consistent with the original article, which indicates that “December changes [are] highlighted in yellow.” Enjoy.

Apple Inc. (AAPL)Credit: Philip Elmer-DeWitt, Apple 2.o/Fortune

Let us know your thoughts on Apple Inc. (NASDAQ:AAPL) in the comments section below, and if you’re encouraged by the Street’s Cupertino state of mind, or if you think analysts need to readjust their targets a bit more. Either way, we’d love to hear your opinion.

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