S&P Capital IQ Downgrades AAPL to Buy

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Investment research firm S&P Capital IQ issued a downgrade on Apple Inc. Thursday, dropping their recommendation on the company’s stock from a “Strong Buy” to a “Buy.” In a research note, the company told clients it was pretty meh on Apple’s product line this holiday buying season.

According to The Wall Street Journal (subscription required), S&P Capital IQ said that it sees less excitement about Apple’s products than it has in holiday seasons past. The company also believes there is increased competition for smartphones and tablets, two key markets for Apple.

On a more long-term basis, the research note said that the loss of Steve Jobs, who passed away on October 5th, will affect the company’s product development (including the refinement process), employee recruiting and retention, and that it increases uncertainty on whether Apple will be able to disrupt new markets as well as it has in the past.

The downgrade was a big part of AAPL’s inability to take part in Thursday’s market rally. The broader markets rose, including tech stocks, as U.S. jobs employment numbers hit a seven month low and it seemed that Europe was getting more of a handle on its ongoing debt crisis.

All three major indices were up, with the DOW closing at 11893.7, up 112.85 (0.96%). AAPL closed lower, ended the day at US$385.22, down $10.06 (-2.55%), on heavy volume of 26.6 million shares trading hands.

*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

1stplacemacuser

What a stupid one-quarter-ahead-foward-looking thinking that goes on in investment research firms.  Who cares what happens with the Apple product line for the next quarter or two.  The real meat is what’s going to happen 3 to 5 years from now and even further on.

Neil Anderson

At his rate Apple will be able to buy all the AAPL shares in 3 to 5 years. smile

Lee Dronick

At his rate Apple will be able to buy all the AAPL shares in 3 to 5 years.

I don’t want to sell mine smile

RadarTheKat

So AAPL, which is the only company on earth that had the advantage of being built by Steve Jobs, is not at some disadvantage relative to all the other companies that never had that advantage.  Such stupid thinking on the part of the analysts.  Apple is still arguably the best company around and until real evidence of a materially change exists, it is foolish at best, and criminal at worst, to downgrade this company.  What other company’s pipeline includes the vision of Steve Jobs?  None.  Only Apple, ergo Apple is still the best company and is still trading at a modest valuation.

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