Apple Axe Gene Munster Throws Cold Water On Apple Stock, Says Earnings May Disappoint

hosed tbiApple investors about to get hosed?

A startling call from Wall Street’s top Apple analyst, Gene Munster: The company’s earnings this quarter may disappoint investors.Gene’s logic?

The iPad has a lower profit margin than investors think. Also, supply-constraints have prevented Apple from selling as many iPads as it could have.

Here’s a quote a source passed on from Gene’s note this morning:

“Don’t expect typical EPS upside due to iPad. The Street is looking for EPS of $4.05. Assuming a typical beat over the past 17 quarters, Apple would report $4.80.

To get to $4.80 on $18.8b in revenue would require gross margin of 43%, well ahead of 39.1% in June, the Street’s 38% September estimate and guidance of 35%. The bottom line is the mix shift and revenue upside driven by the lower margin iPad (about 30% gross margin) significantly tempers EPS upside potential.” 

So what happens if Apple misses Wall Street’s “whisper” expectations? The stock will temporarily tank.

Apple reports earnings next week. Hang on to your hats!

(Meanwhile, some other analyst just jacked his Apple target to $500 a share).

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