Analyst Slashes Apple Inc. Targets – Can Tim Cook Bring Back Steve Jobs-Like Innovation? (AAPL)

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Another day, another downgrade for Apple Inc. (AAPL) stock.

Analyst Slashes Apple Inc. Targets — Can Tim Cook Bring Back Steve Jobs-Like Innovation? (AAPL)The world’s largest publicly traded company hasn’t been doing so hot in the markets recently, with shares down 13% in the last year and 7% in 2016 already.

Underwhelming iPhone sales have concerned investors and analysts alike, and that disappointing trend is likely to continue.

The iPhone still drives more than 60% of Apple’s revenue, and until other products and services like the iPad, Mac, Apple Pay, Apple Music, Apple TV and Apple Watch start contributing more materially, the iPhone will remain the company’s most important driver.

Seizing on those concerns, Wall Street research firm Oppenheimer cut the price target for Apple stock from $155/share to $120/share — a more than 20% haircut.

No More “Easy Growth”

Analyst Andrew Uerkwitz shifted the blame from Apple to the broader smartphone market, which he sees as maturing. He even compared the shifting smartphone industry to (*gasp*) the notoriously static PC and notebook market, adding:

“And investors will have to accept Apple’s transition to a recurring revenue-based model, which may be hard to swallow for some Apple investors.”

Honestly, this has been apparent for some time now; the driver for AAPL stock has become the upgrade cycle for iPhones rather than revolutionary new products or services, which tended to be the driver in the Steve Jobs years.

Oppenheimer isn’t alone in its pessimism on Apple: Recent analyst sentiment on the Street has been overwhelmingly negative, and analysts at Cowen, Canaccord Genuity, RBC Capital Markets, Stifel and more have all slashed their AAPL price targets in the past month.

That doesn’t mean the stock can’t still be attractive, though. If you’re a believer in Apple’s brand, its durability, and its ingenuity, now may be a good time to buy in.

Shares look awfully cheap by fundamental standards, with AAPL stock trading for 10 times earnings and 9 times forward earnings. On some level that’s understandable, given the secular slowdown in the smartphone market and the issues China’s market is going through right now, which is expected as the next growth catalyst for Apple stock.

As an Apple shareholder myself, I can’t pretend I’m not a little worried. I am. But at these low multiples, I certainly can’t bring myself to sell my shares of Apple.

That said, what Apple needs, now more than ever, is another blockbuster product. And from what I’m seeing, I’m just not sure Tim Cook can deliver one.

As of this writing, John Divine was long AAPL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/01/analyst-cuts-apple-inc-aapl-stock-price-target/.

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