Apple's allure not in decline

Tough currency and macroeconomic headwinds will weigh on the coming quarters, but the firm’s competitive position is still strong and shares are attractive today, says Morningstar’s Brian Colello.

Brian Colello, CPA 2 May, 2016 | 5:00PM
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Brian Colello: Apple reported disappointing fiscal [second-quarter] results last night and gave a [third-quarter] forecast that was even a little bit worse than what we were previously expecting; they missed on virtually every metric. But that said, we still didn't see a lot that changes our long-term view on the company. We maintained our $133 fair value estimate. We still think the company's competitive position is very strong. We think the headwinds that they're facing are currency-related, macroeconomic-related, to some extent less excitement about the iPhone 6s than in prior years. But with the stock trading at about $97 today . . . the stock price implies as if Apple is in secular decline, and we wouldn't go that far. We still think there's a lot of customer loyalty there. We still see a very strong competitive position for Apple, and we do like the long-term picture.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Apple Inc148.85 USD-0.31Rating

About Author

Brian Colello, CPA

Brian Colello, CPA  Brian Colello, CPA, is director of technology, media, and telecom equity research for Morningstar.

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