Well folks, Steve Jobs isn’t the CEO of Apple anymore and as luck would have it, the world didn’t collapse in on itself, Apple’s chain retail stores continue to sell millions of dollars worth of merchandise, and thousands of trusty Apple employees trotted into work today at 1 Infinite Loop.
Yup, it’s business as usual for Apple and as Tim Cook explicitly stated in his email to Apple employees this morning, “Apple is not going to change” under his command.
One area where I was expecting to see a huge overreaction to Jobs’ departure as Apple CEO was on Wall Street where investors seemingly know more about suit patterns than they do about wise investments. After all, how else can you explain Apple’s shockingly low P/E ratio in the face of absolutely crushing earnings delivered quarter after quarter?
When word of Jobs’ resignation broke, Apple shares in after-hours trading dipped tremendously. At one point, shares of Apple were down nearly 20 points.
But once the market opened this morning, cooler heads prevailed and today has been a relatively uneventful day for Apple shares.
Yesterday Apple closed at $376.18 a share. While trading today opened up at about $365, shares of Apple have steadily climbed upwards throughout the day and at the time of this writing are trading at $374.07 a share -which only represents a 0.58% drop. Again it’s just business as usual.
While some attribute the lack of moment in Apple share to the fact that Steve Jobs’ health was already baked into the share price, others believe the confidence the street has in newly minted CEO Tim Cook is why Apple hasn’t been bludgeoned to death on Wall Street.
Highlighting Wall Street’s confidence in Apple post-Jobs, here are a few snippets of analyst thoughts about the new-model Apple.
Jefferies analyst Peter Misek:
We believe Tim Cook has been able to demonstrate his deep understanding and expertise in manufacturing and supply chain management. Even with the unfortunate events in Japan around the time of the iPad 2 release, Tim Cook was able to double or sometimes triple source component suppliers. To date, no competitor has been able to gain meaningful share in the tablet market; and, in our view, Cook’s leadership during the introduction was critical to this.
People seem to forget that Cook has been acting CEO for Apple for some time now and has helped steer Apple to unprecedented financial and commercial heights in the face of a global economic decline.
Deutsche Bank analyst Chris Whitmore:
We believe Cook is a highly capable executive and deeply familiar with Apples’ business plans, product roadmaps and operations. He has also acted as interim CEO on previous occasions and we see very little near term execution risk.
Wedbush analyst Scott Sutherland:
The change of the guard does not alter fundamentals, and we see a solid product pipeline driving upside to expectations. The reality of Steve stepping down will likely cause a negative reaction in the stock although we do not expect it to be material. We would remain buyers on any weakness as we believe the fundamentals remain intact. We continue to see solid iPhone and iPad sales, PC market share gains, and new products leading to likely solid upside to expectations for 2011 and 2012. Of note, we see an iPhone 4S this fall, an iPad 3, and an iPhone 5 with a materially revamped user interface and 4G early next year. We also believe Apple will move more materially into the “connected TV” space. We would note that Steve will serve as Chairman of the board. The company did not have a Chairman and instead had two Co-lead Directors.