A number of analysts cut price targets for Apple last week in the wake of the stock’s continued terrible performance.
After reporting earnings in January, including a net profit of $13.1 billion on $54.5 billion of revenue, the stock fell over 10%. The decline continued, with shares hitting an all-time low of $419 on March 4, nearly 40% off the all-time high $702 close in September. Even the company’s oft-cited $137 billion cash hoard has failed to calm investors, with calls for an acquisition or
special dividend growing more aggressive.
An estimated 67% of Apple’s revenue comes from iPhone/iPad sales. It is estimated that Apple could sell an additional 65 million units through carrier expansion alone. Though inconclusive, Apple’s recent talks with China Mobile (CHL) give cause for optimism. In 2012, the company’s 11 stores in China generated an astounding $23 billion in revenue in the absence of a deal with the nation’s largest carrier. The company has also set its sights on Turkey, Brazil, Russia, and India – emerging smart phone markets that could fuel revenue growth for years to come. Low estimates project that these markets will account for $90 billion of revenue over the next two years alone.
Detractors cite the recent perceived lack of innovation, and loss of market share to larger-screen smart phones from competitors like Samsung. If and when an Apple begins to produce a TV – and by most accounts they will – such cries will seem farcical. Even in the absence blockbuster new product carrying over existing sales into new markets will propel the stock upwards over the next several years.
On Monday, Apple saw some of the heaviest call volume with 137,000 calls having crossed the tape vs. about 83,000 puts as of 2 pm. The March 430 Call was the most active strike by far, with volume of about 24,000.
