Thursday, August 25, 2011

AAPL new era after Steve Jobs as CEO

As I updated yesterday blog followers, huge money  flow detected in AAPL   on August 24.

After the market’s close Apple announced executive changes. Tim Cook, formerly Apple’s COO, has been promoted to the CEO position. Apple co-founder and former CEO Steve Jobs has been elected board chair.
The shares swooned on the news in AH trading activity.
Apparently smart money movements during the day were connected to the announcement of executive changes. 
Tim Cook "the ideal candidate" for the role according to Appleinsider, and Cook has been lauded as an  operational genius.

Analyst Maynard Um with UBS remained optimistic about the news. "We expect there to be no transition issues as Cook had been running daily operations as interim-CEO," he said.
He sees Apple's longer-term strategy to be "well laid out" for Cook and the rest of the management team to continue to execute. Um also believes that Apple stock will not fall significantly because of the news, as investors have been anticipating the announcement.
"We would view any weakness as opportunity given our expectation for strong Sept and Dec quarters," he continued. In light of the transition and Apple's hefty cash balance, the analyst called for a share repurchase on the belief that it would be a "positive catalyst."
UBS maintains a Buy rating on Apple, with a 12-month $510 price target.

based on  predictive algorithm using artificial Intelligence (AI), Machine Learning (ML), and incorporating elements of Artificial Neural Networks and Genetic Algorithms - 
issued  negative short term forecast for AAPL  before the announcement of executive changes

J.P. Morgan
Mark Moskowitz with J.P. Morgan described the Apple model as "built to last," reiterating the firm's Overweight rating and December 2012 price target of $525.
"We expect the news to create an attractive entry point for investors looking to add or build bigger positions in Apple. While the news could weigh on shares in the near term, we think the company’s model is built to last, sustaining a “digital way of life” that other industry participants have yet to rival," he said.
According to the analyst, Jobs had a lasting impact on his company that will cement its role in the digital age. "Jobs’ second term as Apple’s CEO drove a stunning recovery and then rise to dominance by constructing a world of mobile devices and content ubiquity."
"We believe that the level of creativity and intelligence assembled throughout the management team and legion of Apple employees can sustain the Apple model and its industry leadership," he continued, adding that he does not expect "too much to change" within the company. "In our view, the far-reaching successes of the iPhone, iPad, iPod, and MacBook Air reflect the work of many, not one."
Moskowitz has a "favorable view" of Cook's ability to lead, citing his proven track record and the integral role he played in "driving the company’s unprecedented revenue and earnings growth phase, limiting disruptions to the operations."
As with Um, the analyst believes Apple's stock has already been "partly discounted" in preparation of a CEO change. He cautioned that the stock will be "under pressure," but does not expect a downdraft.
Morgan Stanley
Analyst Katy Huberty sent a note to investors describing the news as a "well timed and planned leadership transition." She remains "highly confident" in the firm's near-term earnings per share estimates and continues to "rank Apple as best positioned to see upward earnings revision."
The analyst did remark that Jobs is "irreplaceable," while adding that Cook is has a "proven track record of execution." She noted that shares of Apple have generally declined 7 percent after previous health-related announcements from Jobs, before recovering 11 percent, 12 percent and 21 percent over the next 30, 60, and 90 days.
"While this transition is more permanent, it removes the overhang caused by uncertainty around the CEO transition," she added.
The firm reiterated its Overweight rating and $468 price target. She also said her bull case scenario $50 EPS estimate is "still in the cards" for calendar year 2013.


  1. Apple generates more traffic, interest and response than anything else with the exception of beer, sex and, sometimes, sports.

  2. In the era of Jobs, Apple products led the market and consumers. But with the development of the smartphone market and rising competition, the situation has changed. Cook’s apology is not only a failure in the company’s public relations, but more importantly, it reflects the weakening position of Apple’s brand and innovation capacity.
    Apple still provides good products, but does not create demand by innovation anymore, like what it did before.