Apple (AAPL) Shares Drop 6.7% Following Pessimistic Call from Goldman Sachs Analyst

The shares of tech giant Apple Inc (NASDAQ: AAPL) closed with a drop of about 6.7% yesterday following a pessimistic call from Goldman Sachs analyst Rod Hall.

Hall which gave Apple (AAPL) stock a sell rating back in April has also taken a position that has caused a plunge in the shares of Apple (AAPL). In a note to clients, Hall wrote that the Apple’s growth rates “aren’t consistent with the narrative that has driven the stock to its highest premium vs the S&P 500 since 2011,” and that other tech giants like Amazon.com Inc (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) “are delivering the numbers and yet are valued at about the same multiple as Apple.” 

Following this view, Hall believes that AAPL’s shares can drop by more than 30% to $80, as growth in Apple’s services and wearables segments has failed to offset the slowing iPhone sales. Noting that “The iPhone is a very tough act to follow,” Hall said that the non-complimentary growth in Apple’s other business segments is “not likely to be large enough to return the company to growth.”

According to Hall “To turn more positive on Apple’s stock and disprove this thesis, we would like to see the company delivering repeated revenue/EBIT beats against consensus expectations with revenue and profit growth increasing,” the note said. 

Currently, despite AAPL stock rising by 2.86% in the pre-market, the new rise has not been able to offset the 6.73% plunge experienced on Tuesday.

With AAPL Shares Drop, Should Hall’s Notes be Minded?

Rod Hall is an analyst that many have seen to be consistently bearish on AAPL stock. Despite inducing yesterday’s 6.7% plunge, a big question in the mind of investors will be whether to follow Hall’s pessimistic disposition towards AAPL stocks.

According to the Motley Fool, Apple’s stock price has risen by more than 70% since Hall first placed a sell rating to AAPL shares back on April 16. To date, the analyst has been consistently wrong in his forecast for the stock, and with this, the stock may experience another bull run jettisoning Hall’s current disposition.

Apple (AAPL) joins other companies whose operations have been duly impacted by the coronavirus pandemic as the supply chain was disrupted. Despite the disruption of Apple’s operations owing to the coronavirus pandemic, the company has noted that it will be proceeding with its annual Apple event on September 15 where it plans to unveil its latest 5G enabled phones. Following this release, the stock is expected to experience new rallies.

The company implemented a 4-for-1 stock split in a bid to make its stocks affordable for investors. While the company is gearing up to churn out about 75 million 5G iPhone units, pieces of evidence point out that the tech giant’s implemented stock split will likely drive future growths. All these somewhat negates Hall’s bearish disposition for the stock.