The Analyst Who Called the Apple Drop Just Upgraded the Stock
It’s all over for Apple (NASDAQ: AAPL), right?
One analyst doesn't think so. Walter Piecyck of BTIG Research upgraded the stock from “Neutral” to “Buy” with a $540 price target on Thursday.
What’s so significant about the call is that Piecyck was the first to downgrade the stock and predict the drop that has sent the stock tumbling.
“We believe the stock is reflecting low buy-side investor expectations, even if the sell-side has not yet caught up with their estimate revisions,” Piecyk wrote in a research note. “Apple will also benefit from a reversal of the impacts of the tighter phone upgrade policies in the United States, its most important market, and is likely to come to a decision on its cash by the end of the month.”
In the note, Piecyck notes that Apple will soon report quarterly results, which will likely miss its guidance but could also include guidance for the upcoming June quarter that is $5 billion below consensus.
Piecyck believes the company will announce a larger-screen iPhone, a low-priced iPhone for emerging markets, and several, as yet unknown products and services that will add $5 billion to Apple’s sales next year.
“We believe a product that addresses the more than 70% of global wireless subscribers that are unsubsidized pre-paid is necessary in order for Apple to grow its EPS next year.”
As the Wall Street Journal reports, this upgrade is speculative. Piecyk acknowledges that it is based on the potential of “products and services that have not yet been announced and more importantly, an expectation that the management team will actually pursue them.”
In other news that is making Apple executives nervous is the company's toughest competitor, Samsung, announced the Galaxy S4 phone Thursday and has dominated headlines with tales of the phone’s numerous new features.
Features include Air Gestures and Air View, which allow the user to control the phone without coming in contact with the display. Then there’s Drama Shot, a feature that shoots 12 photos at once complete with a time-lapse of all the action in those photos combined into one picture. Finally, the widely discussed Smart Pause feature, which causes a playing video to pause if the user looks away.
Apple marketing chief Phil Schiller was widely criticized for his remarks to reporters Wednesday, where he dismissed Samsung and slammed Google (NASDAQ: GOOG) as a “fragmented” OS that doesn’t deliver as good a user experience as iOS
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