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Are Wall Street Analysts Turning Negative on Apple?

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Ratings on Apple stock

According to the data compiled by Reuters as of February 15, a slim majority of analysts (~50%) covering Apple (AAPL) have given its stock “hold” recommendations.

Another 48% of analysts have given AAPL “buys,” while one out of the 42 analysts covering the stock has given it a “sell.”

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Target price and upside potential

As of February 15, analysts’ consensus 12-month target price for Apple is $178.49, reflecting a potential upside of ~4.7% from its current price of $170.42. In the last month, analysts’ consensus target price on Apple stock hasn’t changed much. However, some analysts seem to have turned negative on the company lately. By the end of January 2019, no analysts covering Apple were recommending “sells” on its stock.

In the quarter that ended in December 2018, many notable Wall Street analysts downgraded Apple, citing its weakening sales in China among other negative factors. Nearly four months ago, the majority of analysts covering Apple (84%) were recommending “buys” on its stock.

Despite expectations of huge positive growth in Apple’s Services segment, its worsening Product segment sales could be the key reason for analysts’ worries.

Ratings on Apple’s peers

Analysts’ recommendations and 12-month return expectations for Apple’s peers (XLK) (IVV) as of February 15 are as follows:

  • Microsoft (MSFT): 92% of analysts have given it a “buy” rating, and their consensus target price reflects a potential ~16.1% upside from its current price.
  • Alphabet (GOOG): 98% of analysts have given it a “buy” rating, and it has a potential ~20.2% upside for the next 12 months.
  • Amazon (AMZN): 92% of analysts have given it a “buy” rating. Its consensus target price suggests a handsome 29.1% potential upside.

In the next and final part of this series, we’ll analyze Apple’s forward valuation multiples.

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