One day after they closed at a five-month low, shares of Apple rebounded more than 1.6 percent in early afternoon trading as Wall Street decided the recent selling spree was an overreaction.
Since reaching its all-time high of $705.07 on September 21, the day the iPhone 5 became commercially available, Apple's stock has dropped about 24 percent.
Why the Friday turnaround? Take your pick:
- Only a few weeks before the holiday season kicks into high gear, AT&T said its iPhone 5 supply situation is improving.
- Separately, Piper Jaffray's Gene Munster said in a note that iPhone 5 supplies are improving both at AT&T and Verizon outlets. As a result Munster remains comfortable forecasting iPhone sales of 45 million between October and November. that it would start to sell the iPhone 5 either later this month or in early December.
- Apple's shares started the day well below the $763-per-share consensus.
- UBS put out a note on Friday encouraging investors to buy with a $780 price target. "With earnings momentum bottoming and near-term upside EPS surprises more likely, we continue to like the stock here," it said.
- Doug Kass of Seabreeze Partners Management also said the selling spree was overdone. "At $536 a share, a discounted dividend model implies that the future growth rate in profits at Apple will be only about 5 percent. This is too low."