So far, analysts are standing by their man. Despite news that Steve Jobs has resigned as chief executive of Apple Inc. , raising some uncertainty over whether the company can maintain its status as the world's biggest – and greatest – technology company, analysts so far have stuck to their bullish recommendations on the stock.
According to Bloomberg, the 29 analysts who have weighed in so far have maintained some version of a "buy" recommendation on the stock, suggesting that the resignation was more or less already baked into the share price. This seems pretty reasonable, given the fact that Mr. Jobs has looked extremely gaunt at public appearances, has battled pancreatic cancer and had a liver transplant recently.
The news of his resignation is, of course, big and somewhat alarming. But it's hardly a big shock, and the effect on the share price reflects this: It was down all of 1.8 per cent in early trading on Thursday. Compare that to some of the freefalls investors had to endure when the market was merely speculating that he was ill.
Keith Bachman of BMO Nesbitt Burns was one analyst who stuck to his earlier bullish views on the stock: "While we concede that Steve has been an unparalleled creative force in the technology landscape, we also believe that Steve has 1) institutionalized a well-understood and optimized product creation process, and 2) brought many of the brightest minds to Apple," he said in a note. "Many senior people have left Apple over the past five years, and Apple products have continued to do extremely well in the market."
However, he did trim his price target, based not on the earnings that Apple will generate but on the price that investors will be willing to pay for those earnings. Given the rising uncertainty, he expects the stock to trade at 13- to 14-times earnings, down from 14- to 15-times earnings. He therefore trimmed his target to $445 (U.S.) from $465.
Michael Walkley at Canaccord Genuity maintained his price target of $515, arguing that Mr. Jobs's successor as chief executive officer, Tim Cook, is more than capable of filling his shoes.
"Mr. Cook is a universally regarded as a strong leader and supply chain expert, and we believe he is well suited to lead Apple to significant growth over the next few years due to Apple's leading iOS developer and application ecosystems and differentiated products," he said in a note. "Further, we believe Apple has a deep and talented executive team in the areas of supply chain management, hardware/software design, and product marketing."
David Berman