Apple Inc. (AAPL): Analysts Are Far Too Pessimistic About This Tech Giant

Building a bridge to nowhere

It’s critically important to remember that sometimes, a stock price can become disconnected from the company’s underlying financial performance. Apple’s fiscal first quarter widely disappointed—and even in that quarter, revenue still grew 17%. Yes, earnings per share were roughly flat in the first quarter year over year, but revenue is the hard part. A company’s expenses can be managed, and all things being equal, if a company’s EPS stalls, I’d much rather it be because expenses were higher than anticipated as opposed to revenue falling.

An analyst downgrade of Apple Inc. (NASDAQ:AAPL), at this point, appears to be relying far too heavily on the stock drop.  Where was the downgrade when the stock was trading for $700 per share?  Further, to compare Apple to J.C. Penney might make for exciting TV, but in terms of meaningful investment advice, it’s foolish. The only thing the two stocks have in common is that their share prices are dropping. The two stocks shouldn’t be mentioned together–they have nothing in common.

The article Analysts Are Far Too Pessimistic About This Tech Giant originally appeared on Fool.com is written by Robert Ciura.

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