It is difficult for analysts to go against the market consensus. That is why it is news when there is a broker who gets off the boat against general sentiment. The KeyBanc Capital Markets firm is not a large investment bank, nor is its analyst Brandon Nispel part of the Wall Street star system; but they have had enough courage to recommend the sale of one of the sacred stocks of the stock market: Apple.
Apple stocks are one of the most revered by investors and analysts. It is covered by more than sixty experts, according to the compilation of Bloomberg. It has 39 equivalent buy recommendations, 18 hold and three sell recommendations.. One of the purchasing tips has occurred today. As in the story of The Naked King, it can be the voice of the child who tells the truth
Brandon Nispel has downgraded the recommendation to sell and the target price at $200which implies a potential drop of 13%. The consensus gives a price target of $243, giving the stock a 5% upside.
But the most striking thing about the recommendation is the arguments used by the analyst. “Apple is an impressive business with what we think they are unrealistic expectations to re-accelerate growth across all product categories and geographies” wrote Nispel, who has been covering the stock for three years and had never been bearish until today.
Apple is committed to posting its biggest growth in the last three years. “While it is certainly possible that Apple could achieve this feat, it is not likely, in our opinion,” says the expert. And it highlights the company’s history. Apple has only seen growth in all segments at the same time only once in the last 10 years, and twice in the last 20 years. Geographically, the company has only grown three times in its five regions in the last decade.
Apple will publish results on October 31and iPhone sales revenue is expected to see an increase in sales after two consecutive quarterly declines. Another incentive will be the forecasts for the new version of the iPhone SE, to compete with low-end mobile phones. “We think investors are too optimistic about iPhone SE unit assumptions for it to be an additive to sales, but we think it will be more cannibalistic,” says Nispel. “Given that Apple is trading at a large premium to history, versus its peers and the broader market, we think the stock is likely to underperform and needs to significantly beat expectations to move higher, which we don’t expect.”
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