Apple shares fell last week after the stock was hit by two analyst downgrades, wiping out over $175 billion in market capitalisation.
The loss in market value sounds grave, but falling to an eight-week low is hardly cause for consternation, especially when the stock remains up almost 50 per cent over the past 12 months. The corollary of that consoling statistic is the stock may be at risk in the event of unexpected news.
Last year’s gains came in the face of four consecutive quarters of declining sales, with investors choosing to look ahead to better days. The end result is analyst concern over the fact Apple now trades on 29 times estimated earnings – well above its five-year average of 24.
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