Apple plans to move away from a more conservative financial reporting style and offer broader guidance. LINK
Apple's new reporting format will test new assumptions and that the difficult year-over-year compares will begin to ease up. The stock is in a transition from growth to value, or as ITZ calls it a quasi- value. Depending on what management decides to do with all that cash; $145 per share. Will it go the path of Microsoft raising the dividend and share buyback? Or go out and buy another company to boost growth? This concern will weigh on the stock's price valuation near term.
ITZ is lowering 2013E EPS from $50 to $46 and 2014E EPS from $55 to $51 FY. Q1 earnings came in $13.81A; Q2 $11.50 est ; Q3 $10.40 & Q4 $10.30. Revenue from $182.1B to $178.5B for 2013 and 2014 from $193.8B to $185.5B
Valuation Price Target: ITZ places a $625 PT based on 10xs 2013 EPS $46 + $165 cash and for 2014 $710 based on 10xs $51EPS + $200 cash per share.
Shares could continue to decline near term ~ $425 next support level.
Past posts: ITZ Apple Q1 earnings report Apple Below $500
Top rated UBS analyst Steve Milunovich cut his price target for the second time this week. Yet he still has a 'Buy' on the stock. Find out why he told Fast Money $425 could be a good guess for the bottom.