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Apple Shares Aren’t Ripe ’Til Fall: Analysts

Tuesday, 15 May 2012 | 11:35 AM ET
iPhone 4 and iPad display
Getty Images
iPhone 4 and iPad display

Apple’s sharesare down about 7 percent over the past month, but analysts don’t see a reversal any time soon.

“I think the stock’s going to range down for the next couple of months because investors really don’t have anything to get excited about this quarter,” Sanford Bernstein analyst Toni Sacconaghi told CNBC’s “Squawk on the Street.” “There’s no new product likely until the September-October time frame, which is the iPhone 5.”

While investors and consumers alike wait for the next Apple gadget, Sacconaghi thinks iPhone 4 sales will decelerate.

As far as its balance sheet is concerned, however, Apple may have breathing room between product launches. Last quarter, the company reported blowout iPhone sales — about 35 million — almost twice as many as it sold a year ago and above analyst expectations.

Apple's Dip: Buying Opportunity?
Should investors be buying Apple ahead of its new iPhone and Apple television? Shares of the tech giant are down 7% in the past few months. Colin Gillis, BGC Financial senior technology analyst, and Toni Sacconaghi, Sanford Bernstein analyst, weigh in on the stock's valuation and growth potential.

Sacconaghi does acknowledge Apple’s strength, warning investors not to be “too cute” with the stock, because “it’s a great fundamental long-term story.”

In the short term, however, another analyst has a “hold” rating on the stock. In the same interview, Colin Gillis, tech analyst for BCG Financial, said he’s “concerned about Apple going lower before it goes higher.”

“We’re seeing iPhone fatigue coming into developed markets. As their product gets older, and in front on an iPhone refresh you have to worry,” said Gillis.

While market expectations are for robust Chinese demand to drive Apple’s sales and make up for any developed market slack, Gillis isn’t so sure.

The largest Chinese telecommunication carrier caters to the less-wealthy part of the country, Gillis notes, which has him thinking Research and Motionand Nokia, each with cheaper price points, threaten to pick up scale in China.

“For Apple to increase scale in China is a very difficult proposition,” he concluded.

—By CNBC’s Jennifer Leigh Parker

Additional News: Telecom Carriers May Cut Back Apple’s Subsidies
Additional Views: How Microsoft Is Scaring Apple

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CNBC Data Pages:

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Disclosures:

Toni Sacconaghi does not personally own shares of Apple, but his firm Sanford Bernstein currently makes a marked (matches buyers and sellers) in AAPL. Colin Gillis does not personally own AAPL shares either, but BCG and/or its affiliates expect to receive or intend to seek compensation for investment banking services within the next three months.

Disclaimer
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Follow Jennifer Leigh Parker on Twitter @jparker741 .

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