Responding to the news that Steve Jobs is stepping down as Apple CEO, Wall Street analysts affirmed the company's position, predicting a relatively uneventful transition for the company and calling Tim Cook "the ideal candidate" for the role.
Apple made headlines late Wednesday when it announced that Cook would be taking over for Jobs as Chief Executive Officer. Jobs wrote in a letter to the Board of Directors and the Apple Community that the day had come when he "could no longer meet [his] duties and expectations as Apple's CEO."
The company's stock fell in after-hours trading, down $19.08 or 5.07 percent. But, Wall Street analysts quickly voiced their confidence in the company, characterizing any drop as a buying opportunity for investors.
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.
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."
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.
Apple made headlines late Wednesday when it announced that Cook would be taking over for Jobs as Chief Executive Officer. Jobs wrote in a letter to the Board of Directors and the Apple Community that the day had come when he "could no longer meet [his] duties and expectations as Apple's CEO."
The company's stock fell in after-hours trading, down $19.08 or 5.07 percent. But, Wall Street analysts quickly voiced their confidence in the company, characterizing any drop as a buying opportunity for investors.
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.
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."
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.
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