Tags: Edward | Zabitsky | Apple | plunge

Top Analyst: Apple Will Plunge Nearly 50 Percent

By Dan Weil   |   Tuesday, 11 May 2010 09:00 AM

Apple Inc. has been one of the stock market’s darlings during the past year, soaring 86 percent.

But independent telecommunications analyst Edward Zabitsky doesn’t think that will last. He predicts that Apple will plummet to $126, down about 50 percent from its recent level of $254.

So what’s going to push the juggernaut technology stock down?

Competition from phones using Google’s Android software will hurt the iPhone, Apple’s biggest revenue producer, Zabitsky told CNBC.

In addition, he anticipates surging government debt will depress the economy, hurting upscale brands like Apple.

“Apple is a luxury brand, and in the past has correlated very well with LVMH Moet Hennessy and Christian Dior,” Zabitsky said.

“America didn’t get rid of the bad debt, the government just took it over, and consumer credit is trending down.”

Plenty of experts remain bullish on Apple.

“Going back to 2006, Apple hasn’t been subject to the economy,” Pete Najarian, co-founder of OptionsMonster.com, said on CNBC.

“It shows people will hold onto their gadgets even if the economy gets tough. If he (Zabitsky) is right and economic circumstances cause Apple to drop to $126, we’ve got much bigger problems to worry about.”

Najarian isn’t the only bull.

"We believe investors can still be rewarded by buying shares into improving sales of both iPads and the iPhone into calendar year-end," Barclays analyst Ben Reitzes wrote in a note to clients, according to MarketWatch.

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Apple Inc. has been one of the stock market s darlings during the past year, soaring 86 percent. But independent telecommunications analyst Edward Zabitsky doesn t think that will last. He predicts that Apple will plummet to $126, down about 50 percent from its recent...
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