Welcome to the MacNN Forums.

If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.

You are here: MacNN Forums > News > Mac News > Wells Fargo downgrades Apple on margin, market cap worries

Wells Fargo downgrades Apple on margin, market cap worries
Thread Tools
MacNN Staff
Join Date: Jul 2012
Status: Offline
Reply With Quote
Jan 2, 2014, 10:43 AM
 
Wells Fargo Securities has downgraded its rating for Apple stock from "Outperform" to "Market Perform," a new memo to investors reveals. The firm says that its earlier, more optimistic forecast was based on an expanding profit margin, driven mainly by the iPhone 5s. "While we still have conviction in the gross margin thesis (and the potential for iPad/iPhone unit upside), we believe this may be largely embedded into the valuation," the memo comments. Share prices are still forecast to sit within the $536-581 range.

"From a positive catalyst perspective, we expect 2014 to be highlighted by new products (iPhone 6, iWatch, iBeacon) and an increase in dividends and/or share repurchases," the memo continues. "However, we're concerned that 1) GM will come under pressure later this year in the iPhone 6 cycle, 2) there is limited amount of incremental market cap opportunity in the existing product segments Apple plays in (including the TV and watch opportunities) without material market share gains, and 3) the balance of power may start to shift back to wireless operators from handset vendors."

Wells Fargo argues that holiday sales were probably strong for Apple, fueled by iPhones and iPads. The firm's estimates include 54.8 million iPhones and 24 million iPads. Every 5 million iPhones is said to add another $1.10 to earnings per share, while every 5 million iPads is said to add $0.37.
( Last edited by NewsPoster; Jan 2, 2014 at 10:46 AM. )
     
   
Thread Tools
Forum Links
Forum Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On
Top
Privacy Policy
All times are GMT -4. The time now is 05:57 AM.
All contents of these forums © 1995-2015 MacNN. All rights reserved.
Branding + Design: www.gesamtbild.com
vBulletin v.3.8.8 © 2000-2015, Jelsoft Enterprises Ltd., Content Relevant URLs by vBSEO 3.3.2