Raymond James doesn’t buy Bloomberg’s Apple item

From a note to clients by analyst Chris Caso that landed on my desktop Thursday:

This morning, a Bloomberg article is indicating that Apple has notified suppliers that iPhone demand has slowed. We offer some thoughts.

The nature of the article is much more ambiguous than typical Apple supply chain reports. Historically, the best gauge of demand has been the production forecast, and whether that forecast is increasing or decreasing. The article doesn’t mention changes to the production forecast, but only that Apple has reportedly told suppliers that demand had slowed, which is a more ambiguous statement.

Our own checks haven’t uncovered significant changes thus far. Given the supply constraints facing Apple at the start of the quarter, it would certainly be surprising if Apple were to cut production, and we would view production cuts as a negative read on demand. That’s however not what this article appears to say…

Net – given the evidence from delivery times and carrier subsidies, we’re not ready to agree with the conclusion in the Bloomberg article.

My take: Wu et al. may have stepped in some holiday bullpucky.

See also: Bloomberg: Apple bears getting burned, despite Bloomberg crying wolf

21 Comments

  1. Fred Stein said:
    My low opinion of Bloomberg just got lower.

    7
    December 2, 2021
  2. Steven Philips said:
    Sliding right down there with NYT, Forbes and WSJ!
    They’re all supposed to understand business! I see little evidence.

    5
    December 2, 2021
    • Fred Stein said:
      Agree. The WSJ is only one I read lately, but they’re slipping too.

      Their coverage of Apple is disorganized with too many generalists covering it. The result is more “main street” than Wall Street.

      Apple, and the other leaders of the global digital transformation, are the new economy. WSJ owes their readers coverage by writers who specialize in this.

      3
      December 2, 2021
    • Lalit Jagtap said:
      I only read headlines from NYT, WSJ and Bloomberg. Stopped payed subscription very long time ago to NYT, WSJ, Bloomberg and FT. I learn from analysis and opinions of members in our community, and individuals like Horace Dediu, Neil Cybart.

      1
      December 2, 2021
  3. Kirk DeBernardi said:
    “Raymond James doesn’t buy Bloomberg’s Apple item”

    Neither do the pirates on jolly ship “Apple 3.0”.

    Arrrrh…TO THE PLANK with ye.

    7
    December 2, 2021
  4. Robert Paul Leitao said:
    It’s my understanding Apple contracts with suppliers for capacity and production. Each year Apple clarifies its production needs around this time on the calendar. This doesn’t necessarily mean there are any “production cuts.” It does mean Apple clarifies its orders moving forward. Year after year these stories appear. Each year these stories create confusion and tumult. Each year, when Apple releases December quarter results, speculation is replaced with facts. I’m looking forward to the facts. I’m tired of this annual “tradition” of speculation.

    8
    December 2, 2021
    • Gregg Thurman said:
      YAY

      Thank you Robert for that brief respite from stupidity, and all of its followers.

      0
      December 2, 2021
      • Jerry Doyle said:
        I hope brother Gregg that you are not referring to anyone on this forum as followers of stupidity. 🙂

        All of us on this forum are into Apple to make some money. One can apply morals relative to the investment strategy we use to do so. It is a choice we can apply, for that is how the markets function. Let’s agree, Sir, that we view options differently.

        The jury verdict is out that options don’t hurt the underlying value of the stock. You say it does not; and I will defer to your infinite wisdom for the moment brother Gregg as I like you, value your opinions, enjoy reading your comments and welcome the day when we come together to fellowship at the next annual shareholders’ meeting.

        I love my Apple stock. In fact, it is such a loving relationship that it is hard for me to sell Apple shares. My daughter’s initial $3,500 Apple investment acquired in June of 1997 is today, $5,958,413.06. Interestingly, we never have sold a share of her Apple stock. In fact, we never have sold a share of my Apple stock, although I do plan next year to sell a portion to purchase a new vehicle.

        Our love for Apple shares run deep. We nurture that love of Apple as long term investors. It is difficult for either one of us to think in terms of pimping our shares of Apple for a spurt of win for our respective benefit vs. nurturing Apple over time through growth into the full realization of what Apple brings us. Options to me is like picking the fruit from the Apple tree without regards to the effects such pickings may have to the health of the fruit picked. That is where you and I brother Gregg agree to disagree. 🙂

        8
        December 2, 2021
        • Robert Paul Leitao said:
          Wow, Mr. Doyle! That’s quite a story! The numbers you posted are beyond my comprehension! You’ve made a huge fortune just buying and holding Apple shares! Congratulations! Let me know if you need a chauffeur or something! I’ll work for some Apple shares. I’m sure you are a generous guy. Let’s say at the current share price just 10 shares a week and I’ll even polish the bumpers on the Bentley! I don’t need much in terms of accommodations in the chauffeur’s cottage, just an Apple TV, free Wi-Fi and maybe an army cot. Oh yeah, lots of hot water, too. Let me know if it’s a deal. One more thing… Since we first encountered each other on Apple 3.0, may I call you “Mr. Jerry”?

          2
          December 3, 2021
  5. Jerry Doyle said:
    Toni denoted on CNBC “Closing Bell” this afternoon that Apple’s buyback program of reducing the share count has contributed to 50% of Apple’s earnings growth. Toni says as Apple share price ascends it becomes more difficult for Apple to continue its buyback program at the same rate, although he concedes that he doesn’t see Apple slowing its buyback program for another five years. During this period, Toni says that Apple continues to buyback anywhere from 3-4% of its shares, per year. So Toni reiterates that top-line growth is going to be the most important factor for Apple going forward. CNBC hangs on to every word Toni utters. 🙂

    3
    December 2, 2021
    • Robert Paul Leitao said:
      Jerry: If that’s the direct quote, he’s in error. Buybacks do not increase earnings or earnings growth by even a penny. They will, however, contribute to higher EPS because there are fewer shares. More than EPS growth, I watch FCF or Free Cash Flow. FCF will determine the size and continuance of the ongoing capital return program more than earnings per share.

      4
      December 2, 2021
      • Jerry Doyle said:
        Here’s the video Robert Paul & All: “…. Apple can buy back 3-4% of its shares in the next five years, Bernstein analyst Sacconaghi”

        Toni Sacconaghi, senior analyst at Bernstein, joins ‘Closing Bell’ to discuss the supply and demand for Apple products as we inch closer to the holidays.

        Go to minute 2:37

        Read in CNBC: https://apple.news/AXjG3wTsRS3yQmZobfRtLbw

        0
        December 2, 2021
      • Jerry Doyle said:
        Robert Paul: I attempted to send you the link. I now have a “… Your comment is awaiting moderation.” I guess because I included the link. I will try something else.

        0
        December 2, 2021
        • Robert Paul Leitao said:
          Jerry: Thank you. PED posted the link. He did misspeak. Buybacks don’t increases earnings. They gradually increase EPS over time. It was just poor phrasing. Because the share count is a moving target so-to-speak, I focus on FCF (Free Cash Flow) and growth in net income to determine the pace of organic earnings growth and the rate of increasing net cash production for return to shareholders and strategic capex deployment.

          1
          December 2, 2021
      • David Emery said:
        And why didn’t anyone challenge Toni on something a sophomore business major should understand?

        0
        December 2, 2021
        • Bart Yee said:
          @David
          The “financial” talking heads who do the interviews to have even a sophomore business major education would be a big assumption.

          0
          December 3, 2021
  6. ‘demand a little weaker’
    WTF?
    Exactly how does that claptrap jibe with the quite typical 7 day wait for any consumer product this time of year? Any weakness will wait, for whatever reason. New iPhone buyers seldom return to Huawei. Especially with a tennis phenom in state lockdown. Mark my words, Apple will report record earnings in every geographic sector for Q122.

    4
    December 2, 2021
  7. Jerry Doyle said:
    Toni Sacconaghi says that Apple can buy back 3-4% of its shares in the next five years. He made this statement this afternoon on “Closing Bell” when discussing the supply and demand for Apple products as we inch toward the holidays. type in https and then the :// and then type apple.news then / then AXjG3wTsRS3yQmZobfRtLbw

    Go to minute 2:37

    0
    December 2, 2021
    • Robert Paul Leitao said:
      Jerry: Apple could continue to buyback 3% to 4% of the fully diluted share count on an annual basis. As the share price moves higher the impact may lessen, but Apple could continue at its current pace for a while. I don’t see a need for Apple to acquire debt to finance more buybacks in the future and I would advise against that practice. But the company can continue with buybacks for the next few years while moving toward a net cash neutral position.

      1
      December 3, 2021
  8. bas flik said:
    i really like the buybacks.
    especially as a healthcheck for the stock.
    buying back stock is a sign of great health.
    and a healthy stock is great for your own health.
    1 apple a day keeps the doctor away.

    2
    December 2, 2021

Leave a Reply