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Tuesday, June 21, 2011

Analysts What's happened to Apple's stock

Analysts What's happened to Apple's stock, apple stock news june 21 2011 : Apple (AAPL) has gone from market darling to market dud. Shares have fallen a little more than 10% in the past four months to $314.64. The stock is trading at only 11 times next year's earnings.

Why is Apple struggling? Analysts have a median price target of $450 on the stock, with 50 urging a "strong buy" or "buy." Investors apparently disagree.

Apple is trading well below its 50-day moving average of $338.98 and below its 200-day moving average of $325.91. Its market value has fallen below $300 billion -- back to where it was at the beginning of the year.

Apple's "non-leadership here as the market tries to find its footing is conspicuous, to say the least," Josh Brown writes on The Reformed Broker blog.

Apple simply should not be here. There's no good reason for it, especially considering the steady stream of good news coming from the company in 2011: the iPad 2, solid earnings reports, a new mobile operating system coming this fall and the surprisingly robust App Store.

Lately investors and analysts have been trying to explain Apple's stock drop, hoping to get a good grasp of what might be happening.

One post at Seeking Alpha cites three major reasons for the share drop. First, there is concern about whether chief executive Steve Jobs will overcome his health issues enough to continue leading. Second, Apple's revenue and profit numbers have become so large that it will be harder for the company to beat them. And finally, all the big tech stocks have been sinking.

Over at Business Insider, Henry Blodget echoes concerns about Jobs and adds a few more reasons: The iPhone 5 did not appear in June, Google's (GOOG) Android is surging, and investors are assuming Apple can't continue its growth rate.

"No one knows whether Steve will return, or when, or even when the question of his return will finally be put to rest," Blodget writes. "So the company is in a sort of perpetual purgatory.

So now the debate about whether to buy shares is in full force. Over in the buy corner is Andy Zaky, an independent analyst who regularly beats Wall Street pros when it comes to estimating Apple's quarterly earnings.

Only three times in the past five years had Zaky told readers to buy Apple stock, and Friday was the fourth. At $325 a share, he said, Apple trades at 8.13 times his 2012 earnings estimate. "For those who are holding the stock here at $320 and have a long-term horizon, don't fall victim to the market's volatility," Zaky wrote Friday. "Those buying the stock today with a two-year horizon will make 56.3% on their money." For the latest updates PRESS CTR + D or visit Stock Market news Today

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