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Analyst updates on Apple
On October 7th, Jefferies downgraded Apple. (AAPL) thefly.com reported that it raised its price target from $205 to $212.92, calling it a refrain from buying.
The analyst is a long-term fan of Apple Intelligence, calling it “the only integrated hardware and software company that leverages unique data to deliver low-cost, personalized artificial intelligence services.” I’m calling.
But Jeffries cautioned that expectations for the iPhone 16 and 17 may be “premature,” noting that AI-enabled smartphone technology could still be years away. As a result, the current predictions of these models are “overly optimistic.”
Related: Analysts reset Apple stock forecasts ahead of key developments
Bank of America announced on October 3 that iPhone Pro shipping times are stable but slower than usual.
Company A’s Company B believes that initial demand may be low because Apple Intelligence will not be available at launch. The investment firm expects demand to increase once AI capabilities become available. The company reiterated its Buy rating and $256 price target for Apple stock.
JPMorgan’s Samik Chatterjee issued a similar review on October 2nd. He said the iPhone 16 launch showed “slower momentum” for high-end models compared to previous cycles, likely due to the lack of AI capabilities at launch. .
As a result, JPMorgan lowered its iPhone sales forecast for the second half of 2024 from 130 million units to 126 million units, according to thefly.com.
Despite the short-term correction, the investment firm remains optimistic about a strong AI-driven cycle in the medium term, reiterating its Overweight rating with a price target of $265.
Cook and other Apple executives sell stock
The company revealed on Oct. 2 that Cook and several other Apple executives recently sold their stakes in the tech giant.
Mr. Cook sold 223,986 shares worth approximately $50.28 million, according to SEC filings.
Apple’s stock price exceeded $200 per share in June and reached an all-time high of $236 in July. Mr. Cook sold his stock at an average price of more than $220.
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Other executives who sold shares include Chief Operating Officer Jeff Williams, who sold 59,370 shares for $13.5 million. Deirdre O’Brien, senior vice president of retail, sold 61,019 shares for $13.8 million. Katherine Adams, general counsel and senior vice president of legal affairs and global security, also sold 61,019 shares for $13.8 million.
Some investors were surprised by Cook’s decision to sell his stake at the time of the long-awaited iPhone launch and early in the AI development cycle.
However, investors should remember that management, including the CEO, sell stock for a variety of reasons. The majority of executive compensation consists of stock options and restricted stock units (RSUs).
For example, the shares sold by Mr. Cook are part of a total shareholder return (“TSR”) plan based on Apple’s stock market return relative to other S&P 500 companies “from the beginning of Apple’s fiscal year 2022 through the end of Apple’s fiscal year 2022.” The award was given to Mr. Cook this year. It’s the last day of Apple’s 2024 fiscal year. ”
Mr. Cook further disclosed that he would sell the stock pursuant to a Rule 10b5-1 trading plan that he set up on May 21, when the stock was trading at $192, well before the actual sale.
Management uses these plans to inform investors about planned transactions and give investors time to prepare. These plans also reduce the risk that management will make buy or sell decisions based on inside information.
Mr. Cook has sold shares in the past, including in April and last October. Details of these sales are included in our Form 4 filing with the Securities and Exchange Commission.
So Mr. Cook may have made his decision less because he thinks Apple stock is overvalued and more because he’s diversifying his wealth. After selling his shares, he still owns 3.28 million shares worth more than $700 million.
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