Apple Earnings Report: Apple is ‘Worrisome’ in Some Ways: Analyst

Apple Earnings Report: When it comes to analysts and their feelings on the current state of Apple Inc. (NASDAQ:AAPL), opinions are all over the place. While many pundits thought yesterday’s earnings report would clear things up, the water appears to be just as murky, which is something no Apple investors wants to hear, period.

Apple Inc (AAPL)Toni Sacconaghi, analyst for Sanford Bernstein, recently cut his Apple Inc. (NASDAQ:AAPL) price target to $600 per share.

In a recent CNBC Exclusive segment, Sacconaghi talked more about his thoughts on Apple and what he sees happening in the near future.

When asked for a wrap up on what he thinks of Apple and where the stock is headed, here is what Sacconaghi had to say:

“So, I think two things on Apple. On the positive side, they did a very significant return of cash to shareholders, at the very high end, I think, of where investors were hoping. And all else being equal, that was a positive.”

Of course, like all Apple Inc. (NASDAQ:AAPL) analysts, there was plenty of downside to discuss as well:

“On the flip side, there was evidence of gross margin pressure in the quarter. They were down sequentially and the company guided for growth margins to go down again sequentially next quarter. And this is worrisome because Apple is at the part of its product cycles where it has introduced new products and typically gross margins should be improving. And to see margins down, even adjusting for mix effects, we believe iPhone margins were down in the quarter, is worrisome, and it points to a mix shift to lower models within Apple’s lineup, which generally have lower margins. And, you know, ultimately my gross margin numbers came down, any my estimates came down, and my price target came down commensurately.”

In a previous segment with CNBC’s Fast Money, Sacconaghi added this about the two trains of thought moving forward:

“If you believe innovation is alive and well at Apple, then numbers are likely to go up, the stock is inexpensively valued and sentiment is likely to become more favorable on the stock. If you don’t believe that premise, we could debate the valuation – it’s probably worth somewhere between $350 and $400 – but I believe the former, and that’s the basis for our ‘outperform.”

If you are interested in watching the entire segment in which Sacconaghi discusses Apple Inc. (NASDAQ:AAPL), the video is included on the next page: