Tim CookSource: Apple

What you need to know

  • An analyst is not at all convinced Apple's value will increase in 2020.
  • In fact, David Kostin thinks a third will be wiped off.
  • And this from the bank Apple chose as its Apple Card partner.

If Goldman Sachs analyst David Kostin wanted to get everyone's attention, saying that Apple will lose a third of its value this year is certainly one way to go about it. And that's what he's done in a note that was picked up by Business Insider.

Kostin is the top US equity strategist at Goldman Sachs and he believes that Apple's stock is on the crest of a wave. And as with all waves, this one will have to come crashing down eventually. And it's going to happen this year, apparently.

In 2019, Info Tech returned 50%, the best of any sector, and accounted for 32% of the rise in the overall index. Only two other sectors, Financials (+32%) and Communication Services (+33%), outpaced the market," he wrote in a note to clients.

Kostin says both of those sectors are overvalued based on their likely growth over the next five years.

Foremost among those companies is the biggest name on the market. Apple has doubled in value in a year, stretching its market cap to $1.3 trillion, and Kostin says the rally — which included a 31.5% surge in the fourth quarter — has gone way too far.

Goldman estimates that Apple's profits will come up well short of Wall Street forecasts this year, and that the tech giant will see its earnings grow at about the same rate as the rest of the market over the next two years.

AAPL started 2020 by reaching $300 per share, double what it was worth in January 2019. And things looked so promising that Gene Munster told CNBC that we might even see shares reach $400 this year, too.

"In 2020, there's going to be five new iPhone models. Typically, that has a benefit to revenue ... the two additional models are likely going to be slightly lower-priced, SE models that really hit the heart of the phone market."

Kostin and Munster can't both be correct. Now we get to sit back and watch as we wait to see which one was.