Apple Stock Slides but Analysts Still Confident

January 3, 2019
605 Views

Apple stock (NASDAQ: AAPL) became the first to exceed a $1 trillion market capitalization last year, but the celebration was short lived with share prices sinking during the last quarter. Some analysts warned that there would be worse to come, fearing that earnings would be less than predicted.

Unfortunately for short-term traders, the analysts weren’t wrong, and Apple stock dipped 8% on Wednesday. It is now the third most valuable company on the stock market behind Microsoft and Amazon.

Tim Cook Confirms Disappointing Holiday Revenue

Apple’s fiscal year ended in September, so the holiday season of 2018 was their first quarter of the current cycle. Original revenue expectations for the quarter were $93 billion. Apple has now changed their guidance to $84 billion.

In a letter to investors, CEO Tim Cook pointed to economic slowdown as the key factor in the revenue shortfall.

He told investors that “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”

Cook also cited some other smaller factors that contributed to lower revenue, including a stronger U.S. dollar, and lower carrier subsidies for Apple products in North America.

Almost Half of Top Analysts Still Recommend a BUY Rating

Despite what sounds like very bad news for Apple and its investors, there are still analysts who believe in the stock. According to FactSet, a leading financial data firm, 20 of the 42 top level analysts still give Apple a BUY rating. Not a single analyst is below the HOLD line today.

These analysts believe that today’s lower price is a relative bargain. Buying now could allow for strong growth if holding stock long-term.

Apple is expanding its business and reinvesting in the United States with new facilities and thousands of jobs. Stock price doesn’t always reflect the true potential of a company, and Apple is still one of the world’s most powerful brands.

If you are looking for a stock pick that could provide high potential over the lifetime of your portfolio, then Apple is still very much worth considering.

You may be interested

Job Hiring is Picking Up as Employers and Consumers Gain Confidence
Economy
548 views
Economy
548 views

Job Hiring is Picking Up as Employers and Consumers Gain Confidence

Lamont J - March 29, 2021

The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…

Fed Could Maintain 0% Interest Rate Until 2024
Economy
489 views
Economy
489 views

Fed Could Maintain 0% Interest Rate Until 2024

Adam R - March 26, 2021

The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…

Supply Constraints Could Slow the Home Market
Economy
555 views
Economy
555 views

Supply Constraints Could Slow the Home Market

Becky H - March 25, 2021

Low inventory has been a constant in the home market for more than a year. The supply of existing and…