Apple Inc. (AAPL) Not a ‘Buy’ Now: Scott Kessler

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Apple Inc. (NASDAQ:AAPL) will be reporting their quarterly earnings today. Scott Kessler, Information Technology Group Director and Senior Equity Analyst at S&P Capital IQ, discussed Apple Inc. (NASDAQ:AAPL) ahead of the group’s results on CNBC’s Earnings Central. Kessler forecasts that the group may post $1.18 in EPS and $38 billion in revenues this quarter and projected a 4% revenue growth, owing to iPad challenges.

“While there is no question that folks are very interested in what Apple delivers for the June quarter, the reality is that people are buying and holding the stock at this point because they are excited about what they see happening in the back half of this calendar year,” he said.

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Among the factors that were piquing people’s interest was a Wall Street Journal article indicating that Apple Inc. (NASDAQ:AAPL) had asked its suppliers to produce 80 million large screen iPhone 6 phones. People were also looking forward to the launch of iWatch and a pending payments offering. He felt that people were also interested to know what will happen after Apple completes the acquisition of Beats music.

Kessler was of the opinion that there was lot of excitement around what is in the Apple Inc. (NASDAQ:AAPL)’s pipeline and what will be available before the holiday shopping season.

“A lot of that good news and expectations are already in the stock, and if there is any level of disappointment, we could see a pull back, because the stock has appreciated more than 15% year-to-date and importantly over 50% over the last year, notably outperforming major industries,” he said.

Kessler said that while they had been recommending Apple Inc. (NASDAQ:AAPL) as a ‘Buy’ or ‘Strong Buy’ for the last five years, even up till May, they now had a ‘Hold’ rating on the stock with a target price of $93 as expectations had now gone ahead of reality.

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