27 Dec

Apple: More Worries for Warren Buffett as Analyst Targets $177.75

WRITTEN BY Jitendra Parashar

Apple

Today, Apple (AAPL) turned negative again after a steep recovery yesterday. On December 26, the stock rose 7.0%, while today at 2:30 PM ET, it was trading with 4.0% losses at $150.83. At the same time today, the S&P 500 benchmark and NASDAQ Composite Index (QQQ)(VTI) were down 2.5% and 2.9%, respectively, after solid recovery in the previous sessions. While today’s broader market sell-off is taking a toll on Apple investors’ sentiment, there’s another factor that could be affecting its stock movement. Let’s take a look.

Apple: More Worries for Warren Buffett as Analyst Targets $177.75

Analyst targets $117.75

According to a CNBC report, the managing director of London-based equity research firm Pelham Smithers Associates, Pelham Smithers, sees more significant downside in Apple stock. In a note to CNBC, Smithers said, “We’ve seen [Apple] on valuations even lower than where they are today. And with the Qualcomm lawsuit, smartphone exhaustion and trade worries, we could easily test those historic lows, which would mean up to 25 percent downside from here.” The report suggests that Smithers predicted a drop in Apple stock “to 117.75 — a price it hasn’t seen since early 2017.”

More worries for Warren Buffett

Apple was the largest single holding of Warren Buffett’s Berkshire Hathaway (BRK.B) at the end of the third quarter. In the third quarter, Buffett’s company bought about 522,902 more Apple shares. Berkshire owned about 252.5 million Apple shares at the end of the third quarter. Its stake in Apple rose to $56.99 billion last quarter, up 22.2% from $46.64 million in the second quarter.

A consistent drop in Apple stock could cost Buffett a fortune unless he has already sold some of his stake in the fourth quarter. We won’t know until Berkshire’s next SEC filing in the first quarter of 2019.

In the fourth quarter so far, AAPL had tanked 30.4% as of December 26. Meanwhile, Microsoft (MSFT), Intel (INTC), Amazon (AMZN), Google (GOOG), and Oracle (ORCL) have lost 12.1%, 2.3%, 26.6%, 13.2%, 13.5%, respectively, quarter-to-date.

Latest articles

Tesla is due to release its third-quarter earnings today after the markets close. Will Elon Musk answer analysts’ questions about Walmart solar roof fires?

So far, Chevron (CVX) stock has risen 4.1% in October. The stock might have risen due to higher oil prices and improving equity markets.

Caterpillar reported its third-quarter earnings today. The company's revenues fell to $12.8 billion—a 6% fall compared to the same quarter in 2018.

Thursday, October 24 marks a huge day for Intel (INTC) investors. The chip and GPU giant is set to report its third-quarter 2019 earnings after the closing bell.

So far, Charlotte’s Web Holdings (CWBHF) (CWEB) has gained 19.7% year-to-date. The company will report its third-quarter results next month.

On October 22, US crude oil prices rose 1.6% and settled at $54.16 per barrel. The S&P 500 Index (SPY) fell 0.4% on the same day.