updated 12:14 pm EST, Thu January 24, 2013
Optimism remains despite reigning in expectations
Analysts at several financial firms have cut their stock targets for Apple following the company's Q1 results. Piper Jaffray has reduced its target from $875 to $767, while Wells Fargo is now aiming for between $600 and $630, and Deutsche Bank is targeting $575. RBC Capital Markets has shifted from $725 to $600, and Canaccord Genuity has dropped its prediction to $650. Topeka Capital Markets has adjusted from $1,111 to $888.
The same analysts are however generally optimistic about Apple's future. Piper Jaffray, Morgan Stanley, JP Morgan, and Evercore are all maintaining "overweight" ratings for the stock; Wells Fargo and RBC are sticking with "outperform" evaluations. Some firms, including Needham & Co. and JP Morgan, have left their price targets unaltered.
Piper Jaffray analyst Gene Munster suggests several reasons for bad investor reactions, which has forced the current price of Apple stock down over $50 in Thursday trading alone to about $460. He notes that Q1 iPhone sales were below expectations of around 50 million, and that the company has switched to a new, more realistic financial guidance approach leaving little chance for "wild upside." The most recent guidance may also hint that gross profit margins will be down sequentially in Q2. Other analysts disagree though, such as JP Morgan's Mark Moskowitz, who says the new guidance method is "not much of a change and could restore beat-and-raise potential to the model."