updated 11:10 am EDT, Tue April 22, 2008
AmTech downgrades AAPL
American Technology Research is downgrading its rating of Apple's stock from "buy" to "neutral," according to firm analyst Shaw Wu. Wu notes that while Apple may well beat consensus estimates and its own guidance, there are several mitigating factors. Apple's stock has rebounded some 45 percent in weeks, which may be creating unrealistic expectations for investors; as such, they may not react well if Apple posts what would otherwise be reasonable figures. A related problem is that shares are now fairly expensive to trade, at 32x CY08 and 28x CY09, producing a situation with considerable risk compared to the profits to be had.
Wu also observes that while the second half of the year may be fantastic for Apple in terms of new products, there will likely be a lull within the next few months, particularly as AmTech's supply chain sources suggest that 3G iPhones will not ship in bulk until July, while new Macs will probably wait until September.
Considering all these factors, Wu notes that Apple stock value could slide to between $135 and $140, a point at which it would be much safer to invest in the company.