Toni Sacconaghi has nothing bad to say about Apple (video)

From "Apple's new hardware subscription model may be a game changer, says Bernstein's Sacconaghi" which aired Thursday on CNBC:

Toni Sacconaghi, Bernstein senior research analyst, joins 'Closing Bell' to discuss Apple's new hardware subscription business and what it could mean for the company.

Cue the YouTube:

My take: I do believe he's come around.


  1. Jerry Doyle said:
    I am puzzle why I like brother Toni. He always brings a smile to my face. I do not know what game he is playing with always low-balling Apple. Here he is now waxing superbly on his vision of the new Apple beyond that of a hardware company, but still approximately four dollars underwater with one of the lower PT of $170.

    The proposed rumor for an Apple hardware/services subscription model is appealing, but I do not know if it is a deal breaker for many folk. The monthly dollar subscription needs to be competitive and not just pro-rating the cost of the hardware-services on monthly terms commensurate with the same amount if purchased.

    Apple hardware is premium build and lasts for years giving continuing service. I held my iPhone X for four solid years of service and easily could have gone an additional year. I notice no degradation in performance during the 3rd and 4th years. In many ways I could have held off with the 13 and waited for the iPhone 14 arrival, thus getting five full years of service from my iPhone X. That would have meant three full years or 36 months of NO monthly payments. So, for me a subscription needs to be less than the pro-rated monthly charge of the device over time if purchased, tantamount to the existing 24 month upgrade program which essentially is paying full price of the phone. Otherwise, just buy the phone and after 24 months keep it for an additional 36 months of no payments, using those accumulated funds to pay for other subscription services. It will be interesting to see how many folk bite for a hardware/services subscription. I do not believe many of my friends would bite; but I will inquire.

    March 24, 2022
  2. Mark Visnic said:
    Apple’s recurring revenue model has been right in from of him for years, a now express hardware subscription plan notwithstanding. He hasn’t seen it or, at minimum, acknowledged it. He’s seemed to have been befuddled by the expanding multiple, often implying that it is nothing more than an overvalued stock based on pulled forward demand. He’s missed Apple for years. My view is that he still doesn’t “get” Apple. Not the value of its installed base, not its supply chain prowess, not the optionality value of its massive free cashflow, not its deep IP, not its culture, not any of the big, beautiful strategic advantages that Apple has built in silicon, retail distribution, and most of all enormously powerful brand. No, sorry, Toni remains a “tool.” Nothing personal and it isn’t as if he fails alone among most of the sell side.

    March 24, 2022
  3. Robert Paul Leitao said:
    Where has he been? I’ve been on an annual iPhone subscription purchase plan for years and it’s called the Apple iPhone Upgrade Program. I’ve been on a monthly subscription program for 2TBs of iCloud storage as a component of the Apple One Premier plan that’s shared with family members at no additional cost. If I want a Mac Studio, I could buy one today on a monthly payment program and when I want to upgrade my Mac again, I will get a trade-in credit. Anyone that’s been following the company in any kind of thoughtful and comprehensive way has been putting the proverbial pieces together for quite some time. It’s all Apple with its product and services approach packaged with a new name. Already for years it’s been “AaaS” or Apple as a Service.

    March 25, 2022
    • Precisely. It seems more like Apple is refining an existing purchase option, to help people understand how to avoid a large bill when they upgrade. And to avoid exorbitant data charges.

      March 25, 2022
  4. David Drinkwater said:
    If you hang Apple (yes, *hang* Apple) on the idea of “predictability” being the Big Winner for Apple, then the joy and surprise of that “One More Thing” is truly dead.

    I think Apple can still innovate, and if it can’t, I seriously have to consider if I shouldn’t just buy railroad stocks.

    (I’m not cashing my chips in for railroad ties just yet.)

    Even while damning Apple with faint praise, Toni still doesn’t *get* Apple.

    March 25, 2022
    • Kirk DeBernardi said:
      One of the worst handicaps in investing in AAPL is first, not “getting” Apple.

      March 25, 2022
  5. Bart Yee said:
    So I don’t get it. The above graphic shows Toni giving AAPL a “market perform” rating from Jan 2021 through Jan 2022 and reiterated for Jan 2022. I checked TipRanks and he basically had Hold rating on AAPL for the past 2 years which I’ll equate to “market perform”.

    Go to Yahoo! Finance or other interactive chart and taking a 2 year perspective, compare AAPL with Dow 30, Nasdaq, Nasdaq 100, or S&P 500 – all broad market indexes.

    On a 2 yr. perspective AAPL consistently outperforms over the market indexes:.

    Returns over 2 years through today:
    AAPL 181%
    Dow 60.4%
    Nasdaq Comp 89.2%
    Nasdaq 100 95%
    S&P 500 77.9%

    Even at a 1 year performance, AAPL tracked the Nasdaq 100 (of which it is a part) from Mar-Nov so I suppose for that 2nd year pandemic time period he was right, but above the other indexes till Mid-Nov of 2021, then diverged markedly above and over all indexes.
    1 year returns:
    AAPL 42%
    Dow 30 4.7%
    Nasdaq Comp 3.4%
    Nasdaq 100 5.25%
    S&P500 14.1%

    Toni’s market perform and Hold pronouncements underrates AAPL severely over the past two years. He has had opportunities to adjust but all he has done, finally, was raise his price target (presumably 6-12 month) to $170 back in Jan. 2022 which put him at AAPL’s then current price before the tech pullback, interest rates, and geopolitical events all dragged the whole market down. Even then, AAPL has outperformed most of its peers and the market as a whole YTD.

    Even now, Toni still can’t get himself to view Apple as anything other than a hardware company. His above commentary is more evidence of not believing Apple could pivot in any number of ways as they already have over the past 4 years.

    March 25, 2022
  6. Jonny T said:
    In a year that Toni calls a bad iPhone cycle year, Apple had how much profit and free cash flow? But still, he’s started seeing (or at least SAYING) what the rest of us have known for many years.

    And, the current cycle IS the new reality.

    March 25, 2022

Leave a Reply