Oppenheimer Sees Near-Term Risks for Apple (AAPL)
Oppenheimer analyst Ittai Kidron said on Tuesday that he does not have high expectations for Apple Inc. (AAPL) in the near-term, despite the stock’s 5% rise in share price in March.
Kidron lowered the price target on AAPL from $600 to $550, which suggests a 19% upside to Monday’s closing price of $463.58.
He notes that in the near-term, Apple may be negatively affected by consumers’ delaying the purchase of an iPhone in anticipation for the new model. This could help drive earnings misses for the next two quarters.
“Like spring training, the national pastime of predicting potential iPhone/iPad release dates is picking up steam and increasingly mid-year focused,” the analyst comments. “Nothing has substantiated, but as news flows, consumers will likely pause purchases awaiting the update. We see risk to consensus and are lowering our March/June estimates while raising Sept.”
However, most of the downside risk is already priced into the stock, says Kidron.
“Much of the revision appears built into investor expectations, and we don’t see much downside pressure from a potential June miss,” he said. “However, we also don’t see much of a NT positive catalyst until we get closer to the product cycle or get more clarity on Apple’s cash intentions.”
Furthermore, Oppenheimer cut Apple’s fiscal 2013 EPS estimates from $45.22 to $44.38 and fiscal 2014 estimates from $50.20 to $49.77.
Despite the tepid near-term expectations, the firm still gives Apple an “Outperform” rating and sees long-term fundamentals as positive.
Apple shares were up $1.52, or +0.33%, during pre-market trading on Tuesday. The stock is down -12.89% over the past year.
The Bottom Line
Shares of Apple Inc. (AAPL) have a dividend yield of 2.29% based on last night’s closing price of $463.58 and the company’s annualized dividend payout of $10.60 per share.
Apple Inc. (AAPL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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