Outside an Apple Store in San Francisco. (Russel A. Daniels, AP file)
The favorite pastime of Apple analysts has turned into "how low can it go?" Along with that question is whether the tech giant can retain its title as the world's most valuable publicly traded company.
In trading Friday, shares of Apple (AAPL) dipped below $441 a share, reducing its market cap to $413.96 billion, below Exxon's $416.95 billion (XOM). Last year, investors and analysts swooned as Apple shares soared and it surpassed the oil giant's longstanding No. 1 spot.
Wall Street analysts loved Apple stock so much in 2012 that they raced to bump up price targets as shares surged to their $700-a-share peak.
With the stock price in free fall, analysts can't seem to take their price targets down fast enough.
Following Apple's report of weaker-than-expected revenue and slackening demand for its gadgets as it loses the innovative edge, the shares collapsed $63.51, or 12%, to $450.50 Thursday. It's the latest in what's been a major deflation of a one-stock bubble, falling 36% from its high in September.
And analysts are now responding. "Things have changed," says Kim Caughey Forrest of Fort Pitt Capital Group. "This was a momentum stock."
Apple's momentum now is clearly on the downside, as seen by the fact analysts are:
• Slashing price targets. Seven of the roughly 50 Wall Street brokerage firms that follow Apple stock cut their price targets Thursday, says data from Briefing.com. Compare that with September 2012, when Apple shares were peaking and four Wall Street firms upped their price targets to an average of $757 a share. Prior to Thursday, another five analysts cut price targets in January. Analysts cut targets after price falls because they "want to look less silly," says Sheraz Mian of Zacks Investment Research.
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SOURCE: USA Today