Apple shares dip below $400

Depending on how you look at it, Apple’s stock price is either a bargain — or downright depressing.

For the first time since April, shares of the iPhone maker dipped below $400 on Monday before recovering slightly in midday trading. In recent trading, the company’s stock was down $12.85, or 3.1 percent, to $400.65 a share. Earlier in the session, the company’s stock dropped as low as $398.05, down $15.45 or 3.7 percent.

The company’s stock appeared to be buffeted by a down market and by a pair of negative analyst reports. In recent trading, the Dow and Nasdaq were off 1.2 percent and 1.4 percent, respectively.

Jefferies analyst Peter Misek cut his price target for Apple shares to $405 a share from $420, citing concerns about iPhone sales. According to his research, Apple is cutting production of the current iPhone even as inventory levels of the phone have built up in the supply chain. Misek consequently reduced his forecast for iPhone sales to 27 million from 30 million and slashed his earnings and price targets.

Meanwhile, Trip Chowdhry, an analyst at Global Equities Research, warned of declining morale among Apple employees thanks to its stumbling stock price. Silicon Valley recruiters are seeing a growing number of resumes from Apple employees who are applying for jobs at companies including Google and LinkedIn, Chowdhry reported.

The analyst noted that the steps Apple has taken to boost its stock price — including an unprecedented debt offering and increasing amounts for share buybacks and dividends — have, instead of achieving their goal, merely worsened the company’s balance sheet.

Those reports appeared to outweigh a more positive take from Keith Bachman of BMO Capital. Bachman raised his price target on Apple to $450 a share from $435, predicting that Apple’s sales and profit in its current quarter will beat the Street’s forecasts. The company’s profit margins will likely rebound in the quarter compared with its previous one, sequentially, because in the prior period, Apple took a costly one-time charge related to warranty costs, Bachman said.

To be sure, Bachman was anything but sunny about Apple’s longer-term prospects, writing that he thought that Wall Street’s expectations for the September and December quarters and for fiscal 2014 were likely too high.

The $400 price point is something of a mile marker for Apple. The company’s stock price peaked last September at more than $700 a share; it hasn’t closed below $400 a share for a prolonged period since December of 2011.

It’s also within spitting distance of Apple’s stock price when Tim Cook became the company’s CEO. Cook assumed the reins from Steve Jobs in August 2011, with the company’s shares trading at around $376 a share. Apple gave Cook 1 million shares of restricted stock valued at that price when he took over.

 

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