Analyst on Apple: There’s No Cause For Panic
After a bad last week for the stock in which it fell more than 5 percent, Apple (NASDAQ:AAPL) closed down again on Monday, dropping 0.77 percent to be at $542.83. Most analysts, though, have not left the company’s side. On Monday, CLSA’s Avi Silver tried to calm more shareholder nerves, writing in his note that the company’s strong fundamentals were ensuring there was no cause for long-term worry. Silver was also very optimistic about Apple’s new 7.9-inch iPad mini.
“We believe Apple’s fundamentals are intact,” Silver wrote, adding that the current drop in the stock’s price presented a “buying opportunity.”
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The analyst added that while Apple’s gross margin presented some “structural issues,” the firm expected “a reversal for the most part.” He also called the company’s two consecutive earnings misses in the June-ending and September-ending quarters uncharacteristic and expected an end to that trend soon. In terms of new products, Silver said he expected a possible full-fledged television from the company next year, going by its three-year “category cycle.” There could also be some major software upgrades and possibly a “mid-range iPhone,” he said.
While Apple has had some trouble meeting the high demand for its new products over the last couple of months, Silver wrote that he believed that situation was now improving.
But he reserved the most praise for the new tablet from the company that tries to take on the seven-inch devices belonging to Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG). “We believe the [iPad] mini will be a blockbuster as it offers significant enhancements over competitive cheaper tablets at a very reasonable price,” Silver wrote.
“The iPad mini will be a home run. As former users of the Nexus 7 and now proud owners of the iPad mini, we believe Apple’s brand, premium feel of the product, 35 percent larger screen (substantial), will drive consumers to pay up the extra $80-130 for this product.”
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