Apple Shares Price: Earlier this morning, CNBC posted a video discussing the recent drop in shares of Apple Inc. (NASDAQ:AAPL). While it may not be anytime to panic, many are beginning to worry now that the stock has hit its lowest level since February 16, 2012.
In the video, Daniel Ernst, an analyst with Hudson Square Research, discusses the current dip as well as what the future may hold.
As the interview gets underway, the host starts by asking Ernst about his price target of $900/share (which is almost double of where shares stand at the present time).
Here is what Ernst had to say regarding the price target:
“Price targets in my opinion are a talking point for what you think the valuation of a stock is, what the opportunity for the stock is, so yea, we continue to point towards a $900 valuation.”
Interestingly enough, Ernst adds that others may not feel the same way about Apple Inc. (NASDAQ:AAPL) at the present time:
“Clearly, that is not the direction other analysts are going right now and its not the direction the market wants to go right now, but that’s the direction the company’s earnings are pointing us towards.”
As we have discussed in the recent past, there is a lot of chatter about Apple cutting iPhone 5 component orders. You can read more about this here and here.
Ernst had plenty to say about all of the rumors circulating that demand for the smartphone is weaker than expected:
“I would say three things about supply chain research. First and foremost, Apple’s business is increasingly seasonal, so the December quarter holds the greatest weight. Second, Apple refreshed their entire product line during the December quarter. I mean, the iPhone 5 came out in December but only to 12 countries. So the entire product line was refreshed, suppliers had to rush to get all those parts into Apple. So naturally, there is going to be a step down on the supply chain from an entire product portfolio refresh in December to the March quarter.”
Finally, Ernst gets around to talking about his third point – which is quite interesting:
“And third, every quarter the last couple of years we keep hearing all the ubiquity of supply chain data points and the estimates on the street are never accurate. So everybody’s supply chain data is so great, why are the estimates always so off on Apple?”
If you are interested in watching the video in its entirety, visit this link.
What are your thoughts on Ernst’s comments? Do you agree with him or do you feel that he is off target?
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DISCLOSURE: I have no positions in any stock mentioned.
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