Apple tries to solve this short week with some improvement after the setback with which the year began. Nothing like losing the dream level of two trillion dollars in capitalization, something that has not been seen in the value since the bad times recorded in its listing last May. But it clearly shows that in this 2023, at least at the beginning, things have not changed in the negative performance that led it to lose almost 27% in the past year with a December of falls of more than 12%.
The last thing that has been calculated is what it has lost in the last year, which added to the 3.74% cuts registered at the beginning of 2023, results in a loss of market value, in capitalization for the first in this ranking. Let’s not forget it in the United States, of almost 900,000 million dollars, which gives a clear idea that it is not only testimonial and important, that it has lost the capitalization level of two trillion dollars. And let’s remember that briefly a year ago it reached a market value of up to 3 trillion.
Still, let’s not forget, Apple could easily buy Amazon, Berkshire Hathaway, and Tesla…and have some pocket money left over to continue shopping. That means, experts say, there are no feet of clay under Cupertino’s and Tim Cook’s façade.
There are several factors that we have been counting throughout the year that have aggravated its situation and its recurring year-on-year lows that it never tires of beating downwards. From the problems in China due to the assembly of its iPhones 14 and the delivery times, first with the confinements and then with the relocations and the consequences of the opening of the country on Covid 0, whose outcome we will see in the accounts of the last quarter which will be published on January 26.
Then the fact of not publishing guides will be of little use to you, something you have not done since the pandemic. An intelligent development that has not served to relax the nervousness of investors who continue to sell the value in the market. In fact, in its price graph we see that the value has lost 2.51% in the last week, with monthly cuts of 11.4% and quarterly cuts that reach 13.1%. So far this year the falls have reached 2.75% and year-on-year they have risen to 26.5%.
But there are more underlying problems. It has been latent since last March the Fed began to raise interest rates in the United States and, since June, to do so exponentially until the end of 2022 in a band of between 4.25% and 4.5%, which can reach up to 5% in this 2023 as indicated by Jerome Powell. A handicap for any technology company in General and the largest ones like Apple in particular.
And a third factor. Your new products may not turn out as expected. And it is that the economic slowdown arrives that can end in recession, for a company in which consumption is the elixir of life and in which the confidence of those who buy, of consumers is declining at a forced march, which could affect to your future demand. In fact, some media point out that Apple has instructed suppliers to manufacture fewer components for its Apple Watch, AirPods and MacBook.
In this environment, in terms of recommendations, from Tipranks we see that, of the 27 analysts that follow the stock, 22 opt to buy the stock in the market and 5 more to keep their shares in their portfolio. His median price target stands at $176.70, with a potential upside of almost 40%.
Confidence among experts that continues to decline, as in the case of Credit Suisse, which places its target price at $184 per share, for which its analyst Shannon Cross points out that supply chains have relaxed in China and that there is less congestion in shipping networks, with shorter delivery times, which have been reduced by 50% after Christmas. For those factors, he maintains an overweight recommendation on the stock.
Exane BNP Paribas sees much worse on the horizon, which has just reduced its recommendation to neutral from hold, with the beginning of the new year, with a target price that drops to $140 per share.
The level between the two is the one that Needham discounts on Apple, with a buy recommendation and PO of $170 per share. They have reduced their earnings per share for 2023 to $6.07 from the previous $6.34 amid the foreseeable fall in global consumption, supply chain shortages and geopolitical tensions between the United States and China. Although they see a ray of light in developing their revenue stream on CTV, in connected TV advertising with a gross profit margin of over 70%.