Atlantic Equities downgrades Apple, raises target

Analyst James Cordwell says the upside potential from 5G is already fully priced in.

From AppleInsider:

Atlantic Equities downgraded Apple on Tuesday, saying the run-up in the shares was mainly due to the much anticipated 5G cycle, but were now fully valued.

The firm lowered its rating to underweight (equivalent to a sell) from neutral while raising its price target to $275 from $235.

“We believe upside potential from the 5G cycle is now more than fully priced in,” Atlantic Equities analyst James Cordwell said.

Shares of the company have increased more than 7% so far this year and are up over 111% over the last year. The stock recently reached an all-time high on the heels of reports of surging iPhone sales in China.

“The stock’s 50% relative outperformance over the last 12 months has been driven entirely by multiple expansion,” the analyst said.

Downgrades to Underweight from Neutral while raising price target to $275 from $235.

My take: From the deep end to the shallow end. What kind of move is that?

CORRECTION: An earlier version of this item had the wrong analyst in the headline.

16 Comments

  1. Aaron Belich said:

    Lead in typo: Arcuri is with UBS and your previous article.

    0
    January 14, 2020
  2. Jacob Feenstra said:

    The mistake of the downgrade is in their assumptions (as usual). The value increase is not simply the 5G cycle. There are a whole bunch of value factors at work that caused a good storm for AAPL.

    4
    January 14, 2020
    • Alan Birnbaum said:

      … such as AirPods as a platform (to add to the wearables including the watch), addition of passive investors whose index funds gobble up the big players (AAPL, MSFT- FAANG, etc), Social ( TV+/News/Arcade)…
      All in addition to the 5G (nm & sub 5G).

      2
      January 14, 2020
      • Jacob Feenstra said:

        @ Alan Right passive investing is another driver.

        0
        January 14, 2020
    • Jacob Feenstra said:

      Sorry. Thought it hadn’t gone through.

      0
      January 14, 2020
  3. Jacob Feenstra said:

    The mistake on the downgrade is in their assumptions (as usual). The value increase is not simply the 5G cycle. There are a whole bunch of value factors at work that caused a great tailwind for AAPL. The mistake that analysts continue to make is simply looking at iPhone sales. You have to look at the whole of the Apple business. Significant decreased (perceived) risk has been and continues to be another major driver. The iPhone level getting to about a 50% proportion of company revenue is a great thing. That is one of the main reasons why buyers might now feel AAPL deserves a higher multiple: lower risk and great potential for growth.

    0
    January 14, 2020
    • Gregg Thurman said:

      The mistake that analysts continue to make is simply looking at iPhone sales.

      It’s called myopia. I understand that it’s a genetic disorder among the species “analyctium” and near uncurable.

      0
      January 14, 2020
  4. Ralph McDarmont said:

    How do these analysts stay employed? And how can their managers/superiors stay alive? Is it all funded by kickbacks? I cannot prove malfeasance but I can sure see incompetence. Thank you PED for helping to balance the BS. I am not particularly bothered by clickbait experts because like any AAPL investor we are vested and know reality. We get bombarded with Apple hate all the time. I am just jealous that so many “analyst” idiots get paid. There is no accountability except for clicks. Breaking news: scientists just thawed out cryogenic Steve and he will marry Tim’s goldfish. Send me a check.

    0
    January 14, 2020
  5. Fred Stein said:

    He’s clueless, because he’s still counting iPhones. Rip Van Winkle.

    0
    January 14, 2020
  6. David Emery said:

    I’m curious what stocks he has in his Buy list, which ones he thinks will do better than AAPL in 2020.

    0
    January 15, 2020

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