Apple Inc. (NASDAQ:AAPL) is usually compared too favorably. Like, “J.C Penney is trying to become the Apple of retail.”
According to CNBC personality Jim Cramer, however, Apple fits into its own metaphor in a not-so-nice way now – “Apple is the J.C. Penney of tech.” What in the world is he talking about? What does this mean in regards to Apple Inc. (NASDAQ:AAPL)?
Cramer spoke Wednesday about the rash of pessimism and downgrades of Apple Inc. (NASDAQ:AAPL) stock in recent weeks, despite some of the gaudy numbers that Apple presents in its earnings reports. He especially marveled at the clairvoyance of some analysts who portend negativity in future quarters.
“Let’s just call it what it is,” Cramer began. “There has not been a single piece of good news about Apple (AAPL) for 300 points, and today is just another day where the news is horrendous. Let’s go over the Goldman downgrade (dropping Apple price target from $660 to $575 a share). They’re not going to miss the March quarter; they’re going to miss the June quarter. I’m waiting for the copy that says they’ll miss 2016, because 2016 is going to be a very bad year for Apple, and of course in 2016 they’ll have 400 bucks a share in cash, but it will be very bad.”
After his bout with snarkiness, he continued with the Goldman research note. “Buried in here is something about new products are already bad. We’re already rating that the products that are coming out in September, will be a clear loser. I mean, we haven’t seen it yet, but it will be a loser. And look at this – the dividend is going to increase, the buyback is going to increase. Not enough. Apple is becoming the J.C. Penney of tech. Everything is keyed on Joe Fresh Apple.
“However, I do think there is a sense that Apple (AAPL) is in a tailspin,” Cramer said, “and it doesn’t seem to matter what they do right now. These are all downgrades on growth, and missed quarters. And when you see someone who is so certain that this quarter is bad and the next quarter is bad, then tomorrow we’l see a downgrade where they’ll say 2014 will be bad. You reach the bottom when you find no one left who lieks it, but there are still a few out there now who still like (Apple).”
When asked directly his take aside from all the pessimism, Cramer said, “First of all, I don’t think (Apple is) awful. Second, there is an installed base that is really good; third, if they had a ‘wow’ product, it would still matter; fourth, if they upped their dividend to 4 percent you would see a floor in the stock and people would be reluctant to downgrade it. Right now, though, whatever they do, just doesn’t matter.”
What are your thoughts about Apple Inc. (NASDAQ:AAPL)? Do you agree with Cramer’s perception, and do you side with Cramer on his own assessment of the company? Let us know your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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