Analyst to Apple: Make December Count

Goldman Sachs analyst Bill Shope cut his price target on Apple (NASDAQ:AAPL) from $810 to $760 after the company’s earnings report missed expectations, but maintained a Conviction Buy rating on the stock.

However, he also added that iPhone supply concerns appeared to have been blown out of proportion in the days preceding the earnings report and expected Apple to “quickly regain some of its recent losses” in the coming days. “We believe Apple’s iPhone shipments and its commentary around supply improvements effectively eliminated a key short-term bear argument for the stock,” Shope wrote in a note to clients.

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The analyst added that while the “relatively lackluster” earnings per share performance and the low gross margin guidance will add to concerns, those worries should be short-lived. “Our analysis suggests that the margin issue will ease soon, but it will take strong December quarter revenue and EPS to make up for the past two earnings shortfalls,” Shope said. “We’ve added some incremental caution to our estimates until this occurs and to account for the weak macro environment,” he added. The analyst cut his next fiscal year earnings per share estimate from $53.07 to $57.59 and that for fiscal 2014 from $64.87 to $60.79.

Apple said it earned $8.2 billion, or $8.67 per share, on sales of $36 billion in the fiscal-fourth quarter. Wall Street had forecast $8.75 per share on sales of $35.8 billion.

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