Trip Chowdhry: iPhone 6s Was Strong, But Apple Stock May Continue To Languish

• Apple Inc. AAPL shares have lost 7 percent over the last six months, being on a downturn after hitting a high of $132.07 on July 20.
• Global Equities Research’s Trip Chowdhry maintained the price target at $155 for the company.
• Despite a strong debut of Apple’s iPhone 6s and iPhone 6s Plus, Chowdhry said that the company's shares continues to struggle as investors have no confidence in its management and board.

Analyst Trip Chowdhry mentioned that sales of iPhone 6s and 6s Plus had so far been strong. He added that Apple could easily sell 12 million units during the inaugural weekend, making it the “highest weekend sale of any iPhones.”

Chowdhry said that 70-75 percent of the sales were to existing users who were upgrading, while 25-30 percent were to Android users switching to Apple and about 10 percent were by Apple Watch buyers.

The company’s stock has declined from $132 to $115, resulting in $110 billion in shareholder value being erased. However, Apple’s management has not done anything to address this erosion of shareholder value, the Global Equities Research report pointed out.

Apple’s management and board embarked on a massive share buyback program that failed to work. Chowdhry commented, “Apple has gone from being a Zero debt company to a Debt-laden company with more than $50 Billion in debt.” This debt was taken to fund buybacks and to pay a large team devoted to find and implement ways to avoid paying $30 billion in taxes.

Investors feel that the company has no interest in increasing the Enterprise Value / Operating Income multiple. “The high Multiple typically occurs by meeting or beating the estimates and raising the guidance....for many quarters under this current Apple's Management and Board, Apple has instead handily beaten the estimates, but guided low,” Chowdhry added.