I call BS on Bloomberg’s Wall Street ‘pessimistic on Apple’ story — updated

One downgrade and suddenly there’s an outbreak of Apple Sells on Bloomberg’s terminals.

From Ryan Vlastelica’s “Wall Street Hasn’t Been This Pessimistic on Apple in Decades” posted after the close Monday:

Rosenblatt Securities downgraded the company to sell on Monday, bringing the total number of bearish analysts up to five, among the 57 ratings tracked by Bloomberg. Five is the highest number of sell ratings the iPhone maker has had since at least 1997, according to historical data compiled by Bloomberg. To put that into context, Apple wouldn’t release its iMac computer until August 1998, and the iconic iPod wouldn’t debut until October 2001.

My take: Something doesn’t smell right here. I track the same pool of analysts and I’ve seen them considerably more sour on Apple than they are today. Take for example, last January. We had one downgrade Monday. We had three downgrades and 19 lowered price targets on Jan. 3, when Apple crashed to $142. “Talk about calling a bottom… on the wrong side of the trade!” says Financial Alchemist‘s Turley Muller.

The claim of the “highest number of sell ratings since 1997” is even more bizarre. According to Muller:

In the 2000’s, pre-iPhone leading back to when the company was coughing in the rug, I bet AAPL maybe had 20 ratings. And back then no analyst put a Sell rating on a stock. Never.

Hoping to reconcile Bloomberg’s reporting with Muller’s and mine, I showed Vlastelica my spreadsheet (scroll below). Could I please see his? His reply:

Hi Phil,

The data was sourced off the Bloomberg terminal. Unfortunately we’re not able to share proprietary data to non-subscribers. Thanks for reaching out.

I’d also like to know where Bloomberg found 57 Apple analysts. I track a couple dozen. Reuters has maybe 35. If you have access to Bloomberg’s list, do me a solid and send it my way: [email protected]

BINGO! See Update below.

Without clarification or correction, Bloomberg’s report has taken on a life of its own. It’s was cited Tuesday morning in support of “Why Wall Street analysts say you should dump your Apple stock” a Cult of Mac headline turned one analyst (Rosenblatt’s Jun Zhang) into many.

My spreadsheet:

UPDATE: Bloomberg’s list below (pasted together from 3 screen shots taken by a FOB). Extraordinary claims (like “Five is the highest number of sell ratings the iPhone maker has had since at least 1997”) require extraordinary evidence. Three problems:

  • We have no data from 1997 or any year between then and now
  • Even including four blacked-out entries, I count 50 firms, not 57, and that includes five firms that haven’t updated their Apple rating or price target in more than a year.
  • To get to 5 sell ratings, Vlastelica has included one of the blacked-out companies (M Science LLC) and a Hong Kong-based research outfit (Altheia Capital) whose 19-person firm includes two machine learning specialists. I’d like to know more about them. Although HSBC’s rating was technically “Reduce,” not “Sell,” I’ll give it to Vlastelica. Giant HSBC’s thumbs down on Apple may be only one among these five that means anything.

bloomberg apple bs

Click to enlarge.

10 Comments

  1. Kathy Corby said:

    Aww, PED, let them lower expectations going into earnings. I always anticipate AAPL earnings as a way to explore new experiences in tippling. Sometimes it’s champagne, sometimes it’s whiskey. As I prefer champagne, and the lower the expectations, the more likely I am to drink it, dream on Bloomberg, dream on….

    2
    July 9, 2019
  2. Fred Stein said:

    You are too kind. From Wikipedia:

    Market manipulation is a type of market abuse where there is a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances with respect to the price of, or market for, a product, security, commodity or currency.[1]

    Market manipulation is prohibited in most countries, in particular, it is prohibited in the United States under Section 9(a)(2)[2] of the Securities Exchange Act of 1934,

    5
    July 9, 2019
  3. Gregg Thurman said:

    Cult of Mac is a great Apple-centric site if you’re not interested in anything that’s going to impact your investment portfolio.

    On this and many other occasions, Cult of Mac shows its “journalistic” limitations.

    1
    July 9, 2019
    • Aaron Belich said:

      They are trying to stay relevant in the age of clickbait drives revenue. Nothing else matters but the click.

      Reminds me of how printing companies relied on the click of an impression made on paper. It didn’t matter the quality or even quantity of toner on the page.

      0
      July 9, 2019
      • David Drinkwater said:

        Back in the age where printing involved mechanical clicks, clicks cost money. The cost of actually printing actual physical paper was – and still is – non-zero. The value of clicks today is inverted: clicks generate revenue: quality does not. Therefore: click-baiting.

        0
        July 9, 2019
  4. Dan Scropos said:

    Having been in Apple about 8 years running, I learned about 7.5 years ago to listen almost solely to Tim Cook and the rest of Apple’s quarterly presenters, and no one else. I’m amused by the daily and weekly upgrades and downgrades, but we really need someone to compose a running scorecard and grade these analysts. Having a 12 month price target and revising it throughout the year is truly pointless.

    They should all give us an annual price target and be graded at year end. That’s it. I want to see the winners, losers and fools exposed. As it stands, they’re allowed to move the goal posts as they please, when they please, and that’s just silly.

    1
    July 9, 2019
  5. Aaron Belich said:

    Thanks for the update… what was Bloomberg’s response to the failure to read the correct number of lines from their own Application?

    1
    July 10, 2019
  6. Turley Muller said:

    Bloomberg dabblin’ in alternative facts.

    0
    July 10, 2019

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