Surprise! Davy tips Apple to lose a lot of its shine
Apple shares will fall by as much as 25 per cent this year as the global market becomes saturated with iPhones, iPods and iPads, Davy Asset Management has predicted.
In a review of Surprises for 2013, to be issued to clients this morning, the private client arm of Davy stockbrokers said it expected Apple stocks to decline to $400 this year. As of January 11th, the Apple share price stood at €520.30.
It also predicts that Dell, Sony, Nokia or Hewlett-Packard will be taken over or nationalised, unable to reinvent themselves following a period of decline.
A surprise, as coined by renowned US strategist Byron Wien, is an event consensus opinion thinks has a one-in-three chance of happening, but which the author thinks has at least a 50 per cent probability of occurring.
Davy Asset Management also believes global stock markets will rise by 10-12 per cent, marking the fourth year of double-digit returns since 2008.
Volatility will remain, however, with global markets trading in a range of -10 per cent to +15 per cent as various issues including Greece, the euro, the fiscal cliff and Chinese growth emerge/resurface.
Reviewing its 2012 list of surprises predicted this time last year, the firm correctly forecast that the euro would survive and the ECB would bring in measures to encourage investors to buy Italian, Spanish and Irish bonds, allowing Ireland to return to bond markets in 2013.
The firm said global equities would rise 15 per cent in 2012, with the US S&P 500 index heading above 1,400. The MSCI World Index produced a 14 per cent return for 2012, having reached an intra-year high of 15.8 per cent in August. The S&P index closed at 1,426 having reached a high of 1,466 in September.
It got Bank of Ireland share price predictions wrong, having forecast them to reach 20 cent. BoI shares reached a 2012 high of 15 cent in February, ending 2012 at 11.4 cent.
It further said the dollar would appreciate to $1.15 versus the euro and sterling would be 75p versus the euro. The euro woes in early summer caused euro weakness, although not to the extent of this “surprise”, the lowest levels were $1.206 and 77.8p in July.
Bloxham Asset Management was acquired by Davy last May following accounting irregularities and renamed Davy Asset Management.