Analyst: Apple to Drop to $270 within 12 Months

| Apple Stock Watch

AAPL will drop to $270. So says ACI analyst Edward Zabitsky.Apple may be trading near US$530 today, but will drop to $270 within 12 months, according to ACI Research analyst Edward Zabitsky. He sees competition from Microsoft and Samsung, along with consumers losing interest in the closed iOS ecosystem, as driving factors in Apple's shrinking stock value.

Mr. Zabitsky sees cross platform support for Office, Skype and Skydrive as strong tools in Microsoft's arsenal that help push Apple's stock value down and giving the Redmond-based company more control over smartphones, tablets and PCs at the enterprise level, according to Businessweek. Samsung's Galaxy smartphone and tablet lineup will dethrone the iPhone and iPad, he speculates, chipping away more of Apple's value.

Leadership turmoil will be yet another thorn in Apple's side, Mr. Zabitsky thinks, pointing to Scott Forstall's departure from the company. He also see's trouble for the company without Steve Jobs at the helm, and went so far as to say that the Maps-related headaches Apple is dealing with wouldn't have happened if Mr. Jobs were still alive.

Apple needs to "develop a more unified approach between its Mac and iOS groups. More than a great innovator, Steve Jobs was a unifying force who was able to challenge people to bring their best game," he said.

Mr. Zabitsky seems to stand alone with his pessimistic outlook for Apple's stock, and hasn't offered any data to back up his concerns. Apple controls a substantial portion of the mobile device market with the iPhone and iPad, and accounts for the majority of online mobile traffic, showing that consumers use its products.

Analysts that recently lowered their 12 month target for Apple's stock, such as Michael Walkley from Canaccord Genuity, still see Apple as a strong and growing company. "While our November channel checks indicated very strong sales of the iPhone 5, we are slightly lowering our fiscal 2013 and fiscal 2014 iPhone and iPad due to softer sales expectations in international markets, primarily in Europe," he said.

Other analysts, like Shaw Wu from Sterne Agee and Topeka Capital's Brian White, see Apple growing through the next year and they aren't concerned about cutbacks in iPhone 5 parts orders -- something Mr. Zabitsky could've cited as a reason for his substantially lower target price.

Apple is still growing its iPhone 5 market, too, most recently with over 2 million units sold during its first weekend in China. Shaw Wu from Wells Fargo took that as a positive sign stating, "Apple's announcement this morning (12/17) should help to allay concerns and provide us with additional comfort that the company will either meet or beat our 46 million iPhone estimate for the December quarter."

Mr. Zabitsky relies on complaints about Apple's Maps app as proof that Apple's control over consumers is weakening. Apple had to deal with criticism after dropping Google's Maps for its own service with the release of iOS 6 thanks to incorrect driving directions, mission locations, and no street view option. Apple has been addressing those issues and CEO Tim Cook even said the company is "throwing its weight" into fixing Maps-related problems.

Despite Maps complaints, iPhones are still selling as fast as Apple can make them, and consumer interest doesn't seem to be letting up.

There's always the possibility that unforeseen circumstances could drive Apple's stock down to $270 some time in the next year, but for now Mr. Zabitsky seems to be all alone with his prediction.

Apple is currently trading at $528.54, down 5.36 (1.00%).

Comments

Lee Dronick

Competition from MicroSoft! With what, the Surface?

Intruder

I call shenanigans.

sflocal

Great.  Another “Apple is doomed” prediction.

If there is any advantage to the stock dropping down that low, is that Apple should use some of that cash hoard to buy their stock dirt-cheap, and give a middle-finger to Wall Street.

The crap spewing out from the analysts’ mouths is just laughable.  Sure, if Apple did absolutely nothing from now on, perhaps something would be wrong.  *rolls eyes*

davebarnes

Mr. Zabitsky is the wrong honorific.
Idiot Zabitsky would be better.

ibuck

Jeff, could you hold Zabitsky’s feet to the fire when AAPL announces this quarter’s results next month? And I’d like to know about any tech stock recommendations he’s gotten correct.

Bob Forsberg

The only way AAPL will ever see $270 is at a $540 2 for 1 split.

gnasher729

Apple has about $100 per share in the bank. And the P/E ratio today is about 11.5. $270 would mean a P/E ratio less than 4 once you exclude the cash. Totally ridiculous.

Tiger

Dude, you’re about 3 and a half months too early for April Fool’s Day.

So, forever forward, December 19th is Zabitsky Fool’s Day!

Eideard

Incompetent.

bryce is right

All stocks go up and down.  All companies experience time at the top and bottom.  Apple will not be the dominantly successful company it is now forever.  Its just not possible.  Someday their stock will be worth $270 and less.  I don’t think it will be anytime soon though. 

I think this analyst probably just started reading too many tech blogs for the first time.  I don’t think the vast majority of apple consumers care at all about a closed ecosystem.  They don’t care about more unity between iOS and osx, and they never heard of Scott forstall.  They just want an iPhone and an iPad and an iPod because that’s what you get when you want something new and shiny.  That won’t change in the near future.

b9bot

Apple’s maps seems to be the big STUPID excuse for everything. Just because maps isn’t perfect doesn’t mean the whole product line is somehow effected. Microsofts Surface is a failing product and to expensive. Quality is crap as noted by the $200 keyboard covers falling apart in less than a month.
Results for the Christmas quarter will shut people up like Zabitsky for writing such STUPIDITY! Apparently Zabitsky has not visited an Apple store lately or a Microsoft store for that matter. Go take a look dumb ASS, products are flying out the door at Apple. You could count crickets at the Microsoft store as the employees dance in the windows with nothing to do because nobody’s buying anything at Microsoft. I’m amazed at how blind these people are to think just because one piece of software wasn’t perfect at launch that everyone is just going to abandon IOS and all Apple products. I’ve used maps and haven’t had a single issue with it. There’s a lot more to IOS and Apple than just maps and it is all great stuff.

Paul Goodwin

If you rough out a best fit straight line of AAPL from March 2009 to Dec 2011, the shares went up at a steady pace for almost 3 yrs at about $9 / month ($100 to $392 over 33 months). If you disregard the bizarre increases in 2012 (an aberration IMHO), and calculate what the stock should be at today, you get roughly $500/share. And it shouldn’t have really hit $700 for another two years. So my conclusion is that the stock is about where it should be (maybe a little high right now). My expectation is that it will continue to rise at about $9/mo over the next year, and I see no reason to not believe that it will. I’m holding on to my paltry 17 shares for the foreseeable future. I’d buy more if I had the cash.

Michael

“consumers losing interest in the closed iOS ecosystem”

There are very few consumers who even know the difference between closed and open. All consumers really want is their stuff to work and work well.

Mapgate was overblown and hasn’t affected 99.999% of iOS users - about the same percentage of people thrown off by Google’s Maps, which has errors as well.

The Surface will fail. If there was any real interest in a tablet running a full version of Windows, THERE WOULD ALREADY BE A MARKET FOR IT, with or without Micrsoft’s device.

Paul Goodwin

Speaking of Apples Maps, I just searched for the closest Staples Office Supply on both the new Google Maps for iPhone and Apple’s Maps app. Google Maps got it wrong, and Apple maps got it right. Even when I put the street address into Google Maps, it would show a location that was appeoximately where an Office Depot was - about 1/2 mile away. And it showed an Urgent Care center at the location where the Staples really was.

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