TLDR:
- Apple stock returned +2.3% over the past month, outperforming the S&P 500
- Earnings estimates for current quarter: $1.54 per share (+5.5% YoY)
- Revenue estimate for current quarter: $94.48 billion (+5.6% YoY)
- Analyst added Apple to “tactical outperform” list with $250 price target
- Apple stock closed at $231.30, up 1.65% in recent trading session
Apple Inc. (AAPL) continues to demonstrate its market strength, with its stock price showing resilience in the face of mixed signals and ongoing challenges.
Over the past month, Apple shares have returned 2.3%, outpacing the S&P 500’s 4.9% gain during the same period. This performance comes as the tech giant prepares to release its fiscal fourth-quarter results on October 31, 2024.
Analysts are closely watching Apple’s earnings projections, with the current quarter’s expectations set at $1.54 per share, representing a 5.5% increase from the previous year.
Revenue estimates for the same period stand at $94.48 billion, indicating a 5.6% year-over-year growth. These figures suggest a steady, if not spectacular, performance for the Cupertino-based company.
Despite facing headwinds in the Chinese smartphone market, where domestic brands like Huawei are gaining ground, Apple appears poised to offset potential market share losses with growth in developing markets and the United States.
The company’s diversified product lineup, including its wearables and services businesses, is expected to contribute positively to both top and bottom lines.
Evercore ISI analyst Amit Daryanani has added Apple to the firm’s “tactical outperform” list, maintaining an outperform rating with a price target of $250. Daryanani believes that Apple is “well positioned to outperform against low expectations” for the September quarter and upcoming guidance. This optimistic outlook comes despite recent bearish sentiment surrounding the stock.
The staggered rollout of AI features in Apple products is anticipated to result in a stronger and more prolonged iPhone upgrade cycle. As new features and markets are introduced, word-of-mouth advertising is expected to drive continued interest in Apple’s flagship product.
In recent trading, Apple stock closed at $231.30, marking a 1.65% increase. This performance outpaced the S&P 500’s daily gain of 0.77%, as well as the Dow’s 0.47% increase and the Nasdaq’s 0.87% rise.
Investors should note that Apple’s current valuation metrics show a premium compared to its industry average. The company’s Forward P/E ratio stands at 30.17, significantly higher than the industry average of 15.36. Additionally, Apple’s PEG ratio of 2.38 exceeds the industry average of 1.79, suggesting a potentially overvalued stock based on expected earnings growth.
Looking ahead, consensus earnings estimates for the current fiscal year indicate a year-over-year change of 8.5%, with projections for the next fiscal year suggesting a 13.4% increase. These figures have seen slight downward revisions over the past month, reflecting ongoing market uncertainties.
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