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

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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?

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