A fun piece from Nick Summers on the agony and ecstacy of Apple stock analysts as the company’s shares have taken a post-September dive after years of rapid growth:
Analysts who make provocative calls on Apple often find themselves the subject of media attention—all the more so now that Wall Street is split on whether the company will resume its upward path or squander its smartphone advantage to Google’s (GOOG) Android platform. “There is pressure to have a unique take on Apple all the time,” says Ben Reitzes, an analyst with Barclays (BCS). “There is. There is.” Viewers of Fox Business Network (NWS) heard an upbeat anchor introduce a segment this way on Oct. 25: “Brian White, senior analyst for Topeka Capital Markets, has an astounding price target. Astounding! And he joins us now!” White’s target: $1,111.
Hating on Apple gets attention, too. “Meet Ed Zabitsky, the man betting against Apple,” read an April 7 headline in London’s Daily Telegraph about the ACI Research analyst, who forecasts $270. Canaccord Genuity’s Walkley says media fascination with Apple’s struggles makes his job more challenging. “Yesterday, on CNBC (CMCSA), I didn’t really want to do it,” Walkley says of a mid-December appearance on the network. “I had a buy on Apple, I’m positive, and they wanted to be real negative, and so it was like this confrontational interview. Negative news sells on Apple.”
This media circus is fun, but the obvious counterpoint is that not only is it difficult-to-impossible to reliably forecast a company’s share price movements but if you could do this, then telling everyone about it on television would be a ridiculous way to proceed. That’s valuable information. I’m just out here grinding on the Internet looking for clicks, so I’ll sometimes offer an observation like that Apple’s PE ratio is absurdly low compared to Amazon’s. But does that mean Apple’s primed for growth or Amazon’s primed for a crash? I don’t know, and if I really thought I did know I’d go out and make millions not blog about it.