BMO Capital Analyst is Cautious on Apple as Consumers go to Rival Products (AAPL)

BMO Capital Analyst is Cautious on Apple as Consumers go to Rival Products (AAPL)


BMO Capital analyst reported on Friday that he has become cautious on tech giant, Apple Inc.(AAPL).

Analyst Keith Bachman said that he is now more cautious on Apple after talking to international carriers. The iPhone, which was the turning point in smart phones, is now facing fierce competition, and many consumers are choosing rivals products.

One problem that Apple ran into was the lack of differences between the iPhone 4S and the iPhone 5, which hurt the company after the release of the iPhone 5 when high expectations were not met.

The analyst said that, “in aggregating the comments, people we spoke with mentioned that the iPhone 5 is a good device that gets interest, but is not materially different from the iPhone 4S.” He mentioned that after speaking with store managers in Barcelona, other cell phones are gaining attention, noting that Samsung products are now the most popular.

Bachman said that he estimates 37.8 million iPhones being sold in March, and 34.5 million in June. For iPads, he expects 18 million sold in March and 19 million sold in June. Although he says that these numbers are “reasonable,” he sees continued decline for the company.

According to Bachman, iPhone’s moving to the mid-price range is expected. He also sees Apple releasing iPhones with different screen sizes, noting that a larger screened iPhone is essential for Apple.

BMO Capital reaffimed a “Outperform” rating on Apple and $580 price target, suggesting a 24% upside to the stock’s current $438.88 price.

Apple shares were down -$3.46, or -0.78% during premarket trading Friday. The stock has declined -15.5% in the past year.

The Bottom Line
Shares of Apple Inc.(AAPL) have a 2.40% yield, based on Thursday’s closing price of $441.40.

Apple Inc.(AAPL) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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