Are These Apple Bears Getting It Wrong?

As Rocco Pendola at TheStreet points out, if there’s a reason to be bearish on Apple for the holiday season, then companies like Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) may as well cut their losses and fold. The problem doesn’t seem to be a concrete evaporation of demand, but a failure for analyst expectations to properly align with reality. And if Apple can’t meet expectations, who can?

At minimum, Pendola’s position is an allegation that the analysts have no idea what’s going on. At maximum, it’s a call to action for investors and even the Securities and Exchange Commission to investigate how analysts make their calls.

JPMorgan attributes the recent sell off to speculation that the iPhone 5 supply chain has been adjusting to lower orders, but remains bullish on the stock. Even if there are production cuts, margins are expected to remain high. The firm has a $770 price target and an “Overweight” rating on Apple.

Analysts know that their ratings and evaluation of a stock will affect how people behave. As such, they have a responsibility to make reasonable, intelligent calls. Pendola argues that the sudden, aggregate shift in position from a number of analysts is either incompetence or foul play. Whichever, there’s no denying it’s having a profound impact on the stock, which after a precipitous decline, closed up 1.7 percent on Monday and up 2.9 percent on Tuesday, before falling about 1.4 percent on Wednesday.

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