Apple Stock Is Going Down, One Analyst Says. Here’s Why

The Street2021-03-19

Recently, I laid out the arguments supporting Wall Street’s most bullish of theses on Apple stock. Some of the highlights included the doubling of services and wearables revenues in five years, the 5G...

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Comments

Drannek
2021-03-22
Drannek
Nice article
Chimmy
2021-03-22
Chimmy
Apple is the kind of company that will still be existing after we die.
Yc3
2021-03-22
Yc3
Comment this post please
- Yc3:
  Thanks
Couragesther
2021-03-22
Couragesther
Hmm.... Microsoft might be a better play
Shifeng
2021-03-22
Shifeng
Why we should trust analyst? Be your own analyst!
MK虎
2021-03-22
MK虎
?
- MK虎:
  good sharing

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Some of the highlights included the doubling of services and wearables revenues in five years, the 5G super cycle, the greenfield Apple Car opportunity, and an acceleration in share repurchases.\nNow, I look at the flip side of the coin. How would one support the most bearish argument on Apple shares? At least one analyst has compiled a laundry list of items that makes him fear for a 35% drop in the stock price from current levels.\nApple might be too hyped\nGoldman Sach’s Rod Hall is one of those very rare Apple analysts that maintain a sell rating on the stock. While I have not come across research from him that is more recent thanlate January, most of his bearish points still seem relevant today.\nFor starters, Goldman does not seem impressed with the near-term smartphone opportunity. According to the research shop, the iPhone 12 resembles a “redesign cycle” rather thana more meaningful “5G super cycle”. As a result, iPhone replacement rates should be low in 2021.\nStill on the same subject, Goldman projects ASP (average selling price) to come down this year, as buyers shift to cheaper models like the iPhone 12 mini and the iPhone 11. Here,recent data points have been suggesting the opposite: the mini seems to be the biggest loser within the product portfolio, while the Pro and Pro Max have been performing above expectations.\nAlso, Mr. Hall does not seethe Apple Car opportunityas a profitable initiative.Accordingto him:\n\n “The auto industry has generally lower gross margins than Apple's own current businesses. Tesla's gross margins are about 20%, compared to Apple's 40%. Operating margins are even lower, typically in the high single digits. Even in optimistic scenarios, the release of a production Apple Car is likely to have only a minor impact on Apple's bottom line.”\n\nLastly, the analyst believes that the end of the COVID-19 crisis will trigger a discretionary spending shift from tech devices (iPhones, Macs) to away-from-home services (travel and leisure). This could be a negative catalyst for the stock in 2021.\nThe Apple Maven’s take\nIn my opinion, the market is not the place to cheer for or against a stock. This is what sports arenas are for (after the pandemic is over, of course). So, I think that even the most confident of Apple investors should pay attention to the bearish case on the stock, and think through the arguments critically.\nI think Goldman raises good points about the hype around the 5G super cycle and the Apple Car. Whether either can push Apple’s financial results significantly above current consensus remains to be seen. 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Who will be proven right?","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":359874843,"gmtCreate":1616387760182,"gmtModify":1704793358556,"author":{"id":"3574915032906549","authorId":"3574915032906549","name":"Drannek","avatar":"https://static.tigerbbs.com/a43a109f2acd3580907a53160ba1f98f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3574915032906549","idStr":"3574915032906549"},"htmlText":"Nice article","listText":"Nice article","text":"Nice article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/359874843","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":359870352,"gmtCreate":1616387169276,"gmtModify":1704793346827,"author":{"id":"3565004892423880","authorId":"3565004892423880","name":"Chimmy","avatar":"https://static.tigerbbs.com/eb71d738ca2f4da611b425823ebf3c60","vip":1,"crmLevel":4,"crmLevelSwitch":0,"authorIdStr":"3565004892423880","idStr":"3565004892423880"},"htmlText":"Apple is the kind of company that will still be existing after we die.","listText":"Apple is the kind of company that will still be existing after we die.","text":"Apple is the kind of company that will still be existing after we die.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/359870352","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":359115714,"gmtCreate":1616373565238,"gmtModify":1704793144645,"author":{"id":"3567136329417120","authorId":"3567136329417120","name":"Yc3","avatar":"https://static.tigerbbs.com/2c6fb3b8c918f8718ab8d5b1792e9f37","vip":1,"crmLevel":4,"crmLevelSwitch":0,"authorIdStr":"3567136329417120","idStr":"3567136329417120"},"htmlText":"Comment this post please","listText":"Comment this post please","text":"Comment this post please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/359115714","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3848988,"gmtCreate":1616373590812,"gmtModify":1680781206819,"authorId":3567136329417120,"author":{"id":3567136329417120,"idStr":"3567136329417120","authorId":3567136329417120,"name":"Yc3","avatar":"https://static.tigerbbs.com/2c6fb3b8c918f8718ab8d5b1792e9f37","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":359115714,"type":1,"supId":0,"prevId":0,"content":"Thanks","text":"Thanks","html":"Thanks"}],"langContent":"EN"},{"id":359115867,"gmtCreate":1616373540159,"gmtModify":1704793144000,"author":{"id":"3557433279201512","authorId":"3557433279201512","name":"Couragesther","avatar":"https://static.tigerbbs.com/fb776fde22322bb11f3651d216a6b06e","vip":1,"crmLevel":3,"crmLevelSwitch":0,"authorIdStr":"3557433279201512","idStr":"3557433279201512"},"htmlText":"Hmm.... Microsoft might be a better play","listText":"Hmm.... Microsoft might be a better play","text":"Hmm.... Microsoft might be a better play","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/359115867","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":359119370,"gmtCreate":1616373225790,"gmtModify":1704793135122,"author":{"id":"3554690739454545","authorId":"3554690739454545","name":"Shifeng","avatar":"https://static.tigerbbs.com/7eba636a69f64b047187455fad28835a","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":0,"authorIdStr":"3554690739454545","idStr":"3554690739454545"},"htmlText":"Why we should trust analyst? Be your own analyst!&nbsp;","listText":"Why we should trust analyst? Be your own analyst!&nbsp;","text":"Why we should trust analyst? Be your own analyst!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/359119370","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":359131268,"gmtCreate":1616372788854,"gmtModify":1704793124612,"author":{"id":"3568147919716944","authorId":"3568147919716944","name":"MK虎","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"authorIdStr":"3568147919716944","idStr":"3568147919716944"},"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/359131268","repostId":1103756496,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3848823,"gmtCreate":1616372924957,"gmtModify":1680781204936,"authorId":3568147919716944,"author":{"id":3568147919716944,"idStr":"3568147919716944","authorId":3568147919716944,"name":"MK虎","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":359131268,"type":1,"supId":0,"prevId":0,"content":"good sharing","text":"good sharing","html":"good sharing"}],"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":712,"commentSize":313,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1103756496"}