Global shares and big technology shares were likely to come under pressure again on Monday after Apple shares were downgraded following a drop in big technology stocks Friday caused the Nasdaq composite to post its worst week of the year.
Saying the best case scenario is priced into the shares, Mizuho Securities' Abhey Lamba downgraded the iPhone maker to neutral from buy on Sunday. For investors taking profits in big technology stocks last week, the analyst echoed a common concern.
"The stock has meaningfully outperformed on a YTD basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out," wrote Lamba, who cut his 12-month price target to $150, which is about one dollar above where Apple closed Friday.
While the selling was worse among the biggest stocks a Friday selloff pushed the Nasdaq down more than 1.5 percent last week. Without any specific headlines or adverse new clips impacting the market, but rather investors questioning whether valuations for the names were getting ahead of themselves, resulted in Apple, Alphabets, Microsoft, Facebook and Amazon losing nearly $100 billion in market value on Friday.
And continuing from the Friday even and following the Apple downgrade, Nasdaq-100 futures were lower on Sunday.
"At 15x and 11x NTM EPS and FCF, the stock is trading near the upper-end of its recent valuation range and we believe it is tough to expect the multiple to expand," wrote Lamba. "With limited upside to EPS or FCF estimates, we think the stock is fully valued."
However, so far in 2017, Apple, Facebook and Amazon are still up more than 27 percent. For example, while Microsoft shares are 11 percent higher for the year, Alphabet is up 20 percent. The S&P 500 is up more than 7 percent year-to-date by comparison.
"Our most bullish case yields earnings of about $11 for FY18, which is only $0.50 above consensus," stated the Mizuho note on Apple.
A Wall Street analyst bailing on Apple on a Sunday evening has now happened for a second week in a row at the market. For a start, last week, the stock was downgraded to sector weight by
Pacific Crest. And according to TipRanks.com, there are now six analysts with hold ratings on Apple and 25 who rate it a buy. However, zero Wall Street analysts have a sell rating on the shares despite the valuation concerns.
(Source:www.cnbc.com)
Saying the best case scenario is priced into the shares, Mizuho Securities' Abhey Lamba downgraded the iPhone maker to neutral from buy on Sunday. For investors taking profits in big technology stocks last week, the analyst echoed a common concern.
"The stock has meaningfully outperformed on a YTD basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out," wrote Lamba, who cut his 12-month price target to $150, which is about one dollar above where Apple closed Friday.
While the selling was worse among the biggest stocks a Friday selloff pushed the Nasdaq down more than 1.5 percent last week. Without any specific headlines or adverse new clips impacting the market, but rather investors questioning whether valuations for the names were getting ahead of themselves, resulted in Apple, Alphabets, Microsoft, Facebook and Amazon losing nearly $100 billion in market value on Friday.
And continuing from the Friday even and following the Apple downgrade, Nasdaq-100 futures were lower on Sunday.
"At 15x and 11x NTM EPS and FCF, the stock is trading near the upper-end of its recent valuation range and we believe it is tough to expect the multiple to expand," wrote Lamba. "With limited upside to EPS or FCF estimates, we think the stock is fully valued."
However, so far in 2017, Apple, Facebook and Amazon are still up more than 27 percent. For example, while Microsoft shares are 11 percent higher for the year, Alphabet is up 20 percent. The S&P 500 is up more than 7 percent year-to-date by comparison.
"Our most bullish case yields earnings of about $11 for FY18, which is only $0.50 above consensus," stated the Mizuho note on Apple.
A Wall Street analyst bailing on Apple on a Sunday evening has now happened for a second week in a row at the market. For a start, last week, the stock was downgraded to sector weight by
Pacific Crest. And according to TipRanks.com, there are now six analysts with hold ratings on Apple and 25 who rate it a buy. However, zero Wall Street analysts have a sell rating on the shares despite the valuation concerns.
(Source:www.cnbc.com)
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