Apple is Sinking Way Too Deep
Shares of Apple (NASDAQ:AAPL) hit their lowest point in 10 months, sinking to $507.66 during Friday’s trading after talk about weak iPhone 5 demand in China and two pessimistic analyst reports. UBS trimmed its 12-month price target on Apple shares to $700 from $780 and Jefferies’ Peter Misek cut his current quarter margin estimates by one point to 39 percent.
Apple ended the day at $508.97, down 3.91 percent, or $20.72. It dropped more than 4.5 percent during the week and is now down almost 28 percent from its September closing high of $702.10. It also pulled the broader markets down. The Dow Jones Industrial Average fell 0.27 percent at 13,135 points, while the S&P 500 dropped 0.41 percent to 1,413 points. Seven out 10 industries in the S&P 500 fell, with technology leading the losses.
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Fears of the rapidly approaching fiscal cliff are also having an impact as President Barack Obama and Republican House Speaker John Boehner stay deadlocked on next year’s budget.
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Apple was suffering after UBS analyst Steven Milunovich cut his price target on the stock to $700 from $780, saying that iPhone production will fall in the coming few quarter. Over the next three quarters, Milunovich expects there will be 5 million fewer iPhones built and 2 million fewer iPads than earlier expected. The analyst did maintain his Buy rating on the shares, but the pessimistic view took its effect right from the start of trading in the morning. In the afternoon, Misek said Apple component suppliers had received order cuts in the last 24 to 48 hours, although assembly orders remained unchanged.
There were also reports of a fairly dull iPhone 5 launch in Beijing amid a snowstorm that kept shoppers home.
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