Since its climb in February of 2015 from around $110/share, Apple’s stock has been hovering between $120-$130/share for four months now. Never mind continual profits or record iPhone sales quarter after quarter. No, no. Don’t be confused that actual performance of Apple will translate into actual growth in the value of the company.
As written previously by my colleague Mark, it seems stock price is more related to whether Apple beats Wall Street expectations or not. One does not have to think about this for very long to understand how silly this notion is. It’s akin to advertisers not sponsoring a particular race car driver because the race car driver didn’t meet their speed expectations — even though he keeps winning race after race. “We’ve decided not to sponsor this driver because we expected him to win by two laps and he only won the race by three car lengths.” Silly indeed.
What is even more puzzling, Wall Street analysts continue to come out and say AAPL is a buy and set its target price near $150 for 2016. Today Nomura’s Jeffrey Kvaal put a target price at $145, and what does the stock do in response? As of this writing AAPL it is down almost a dollar to $121.63.
One has to wonder where the stock price would be if Apple had better managed the launch and customer expectations of Apple Watch and Macbook this spring? It was like getting real excited for a boat ride to a nifty island full of carnival rides only to find out that the boat was out for repairs for another three months even though all the employees were pretending rides were happening as announced.
I continue to keep my eye out for an Apple Watch on someone’s wrist who does not work at Apple. As Mark & I will often ask each other, “Have you seen an Apple Watch in the wild yet?” So for the answer is “No”, which is not a good sign that Apple Watch is catching on or making inroads into pop culture like iPhone and iPad did following their launches.
Time will tell if AAPL will get out of the dulldrums and start growing again like it has done for the last several years or whether AAPL has hit a plateau and future growth will be hard to come by.
Disclaimer: Both Mark & Werner own AAPL shares.
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