$AAPL Rallies on Positive Analyst Notes

| Analysis

$AAPLShares of Apple Inc. rallied on Tuesday after analysts with UBS and Pacific Crest issued positive research notes on the company. The stock jumped as much as 3 percent on strong volume, making up lost ground from previous sessions.

Pacific Crest analyst Andy Hargreaves issued a research note saying that iPhone and iPad sales appear to be on target with the firm's analysts. Mr. Hargreaves has only a "Neutral" rating on Apple's stock, but investors may have taken his note as a counter to Peter Misek of Jefferies & Co., who recently said that Apple's iPhone sales were slowing.

Steven Milunovich is more bullish on Apple, and he maintained his $600 price target on $AAPL and a "Buy" rating in a research note he sent clients on Monday. He argued that his price target is a "reasonable" valuation for a company performing at Apple's level.

He acknowledged that investors are clamoring for Apple to release a larger screen iPhone to keep up with popular large-screen Android devices, while pointing out that Apple seldom sacrifices anything for sake of market share.

“Perhaps Apple will meet its internal need for differentiated product while covering more product space to grow revenue as it did with the iPod," the analyst wrote. "If not, it probably will err on the side of yielding revenue dollars though giving up less in profit share."

He also told his clients that innovation into "new categories" will "require investor patience."

As of this writing, shares of Apple were trading at $432.46, up $12.41 (+2.95 percent), on strong volume.

As we noted on Monday, Apple and Exxon Mobil currently have very close valuations. Apple gave up the title of world's most valuable corporation to the energy giant on Monday, but regained the title on Tuesday.

All things being equal, the two companies are likely to continue trading places in the near future until a long term catalyst sparks a bigger move for one or the other. We also noted on Monday that the title is meaningless other than bragging rights.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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Comments

Lee Dronick

“He also told his clients that innovation into “new categories” will “require investor patience.”

Yeah.

RonMacGuy

A rally?  Wow, Apple must have spent some of their cash to buy a company!!

They didn’t?  Oh wait, hmm, I’m confused.  Their cash probably went up from yesterday to today (at $10B a quarter average cash increase, they probably increased cash by over $100M today), so how could their stock rally when they don’t have a good use for all that extra cash they made today?!?!?

grin

CudaBoy

What rally?? The entire Dow was up 10+ today, Apple didn’t do anything special.
I guarantee APPL will go back down tomorrow.

Bryan Chaffin

Sweet, CudaBoy. What specific guarantees can you give me? I am very interested.

CudaBoy

Old Stan Freberg bit St.George & the Dragon Net.  It was a hunch, just a hunch, sometimes a hunch pays off-sometimes it doesn’t; it was just a hunch.
So what yer tryin’ to tell me is….. (repeat above)  If I’m right can I get a mug or a t-shirt?

Bryan Chaffin

Wait, how did you offering me guarantees turn into me paying up? :D

We do have some T-Shirts in the works (can’t name a date yet). In the spirit of something or another, if $AAPL closes lower on March 6th, I’ll send you a shirt when we get them. smile

CudaBoy

That’s a Beatle T-Shirt, right Bry??  lol.
Oddly, I know I don’t seem like it - I’m hard on the hubris laden “sony” Apple but I bought at $15 so when I talk about stock-take me with a grain of salt please (more like a rock of Gibralter grain).... but I was a big Apple honk when I worried if the Mac was going to exist at all - kind of reminds me of NOW in a different way but I dye grass:  I have old “Microsuck” (exact MS logo) T shirts as well as the Gates as Mayor Monopoly T with ‘monopoly’ logo accurately replaced as Microsoft.  Ahh, the good old bad days. If stock doesn’t take a small hit mañana I will design your next logo/T for free. OK maybe you give me some fuzzy dice and we call it even.

RonMacGuy

LMAO, this sounds like one of those “Bosco” guarantees!!  But at least CudaBoy is man enough to admit when he may not know what he’s talking about (reference his ‘with a grain of salt’ comment).

Pre-market AAPL up 1.57 - going to be an interesting day.  Always good to see a small wager between Bryan and a real man (even though his name is Cuda’Boy’!!

grin

TMO T-Shirts, huh?  Awesome!!

CudaBoy

Bosco?? Da Horrah!!!  What happened to the balls of Rodney ??? I am not afraid to bungie jump into the nether regions of ... uhhh ..speculum-ation. But, I’m 2-0 in recent predictions including the need for a small tab - man I took stuff from drones but hey…
Ron, ur a man and as such I will man up with a T Shirt (might be Beatles) if APPL doesn’t take a powder post giddy 3/5.

RonMacGuy

CudaBoy, I like your style!!  And, I bow to your small tab prediction come true - you were spot on, although IIRC I somewhat disagreed with your wording at the time.  But hey, that was a long time ago.  The iPad Mini is here, Apple is still kicking a$$ and taking names from a revenue/profit/cash perspective, and the stock…  Well, who freaking knows anymore?  I’ve got some stock options that I’d love to see pay off later this year.  But hey, it’s all a crap shoot anymore.

Will be watching AAPL today - Let’s see what happens!!

RonMacGuy

Wow, market almost done for the day, and AAPL is DOWN!!  CUDABOY RULES!!

Can’t even use the excuse that the DOW is down, cause it isn’t.  Although google is down, so it must be a tech thing (although S&P 500 is up).

Lee Dronick

APPL is down as part of general NASDAQ derally.

Arthur Stein

Apple started its downslide when Scott Forstall was fired. He was a guru and software intellect. There are no really software teams that can compete with a very talented person.

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