Oppenheimer upgrades Apple based on Jobs health report
There has been as much speculation about Apple’s health as that of CEO Steve Jobs as he became more and more gaunt. Now, based on Jobs’ open letter yesterday, Oppenheimer has cited Apple as a better buy.
Oppenheimer Funds has upgraded Apple from the category “Perform” to the category “Outperform” based on yesterday’s news of Job’s condition, stated as a “hormone imbalance.” Oppenheimer had downgraded Apple stock in mid-December based upon concerns that Jobs’ health could adversely affect Apple performance. Today, as reported by Barron’s, Oppenheimer analyst Yair Reiner reversed that position, saying “While the letters from Jobs and Apple’s board raise more questions than they answer, they allay the central concern we raised two weeks ago: the risk of a hasty, unplanned leadership change.”
Reiner still has concerns that the health problem that Jobs defined as “simple and straightforward” might not be quite that easy to solve, he did feel that the announcements were enough to convince him that no changes in Jobs’ status at Apple were imminent. He said, “it seems unlikely that Jobs, the board, and its counsel would disclose the prognosis of a six-month recovery if it were at odds with doctors’ expectations. … We are satisfied that a sudden change of leadership is not imminent.”
Reiner still has many questions about both Jobs’ health and Apple’s reaction to it, feeling that there has been much left unsaid. He worries that the public does not really know which job functions the Apple CEO is currently able to perform, why the problem became a concern a few weeks ago, or what the detailed diagnosis and prognosis of the health problems are.
The announcements do provide some assurance for the short term, though. If there was not a reasonable chance that Jobs would return to good health, it would have made little sense for both Jobs and Apple to make any announcement at all. It would seem at the least that there will now be time for Apple to prepare and execute a planned transition if Jobs’ health problems persist. Apple is bigger than just Steve Jobs, despite his importance to the company, and it was more the specter of sudden chaos at the helm than the loss of Jobs that was causing the tremors in the financial world. Those tremors seem quiter today than yesterday.
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