Categories AlphaGraphs, Analysis, Earnings, Technology
Post Q4 results, Apple stock to be driven by projections rather than numbers
If there is one stock that hasn’t allowed its growth in size to hamper its rally, it’s Apple (AAPL). Since hitting $1 trillion in valuation on August 2 this year, the stock has gained 4%, even as the other trillion dollar company Amazon (AMZN) tumbled last week to around $800 billion market cap following earnings results.
Looking into the fourth quarter results of Apple, scheduled to be published on November 1, the stock looks rock steady on the back of the latest set of iPhone launches. However, since the results won’t comprise sales data of the new iPhone XR, and will contain only about 10 days of sales of iPhone XS and XS Max, investors will be looking forward to management comments on the initial response and the projections for the holiday quarter.
During the upcoming holiday-quarter, analysts expect iPhone unit sales to touch 100 million, a million higher than the same period last year.
Apple shares will be primarily driven by how the management sees sales to take off during the upcoming quarter, rather than the fundamental earnings figures. However, there will be one figure that investors will be keen to find out – Average selling price (ASP) of iPhones.
Thanks to the organic increase in the cost of the latest version of iPhone every year, the company regularly enjoys double-digit increases in ASP. This quarter, Bernstein analyst Toni Sacconaghi has projected a 29% jump in iPhone ASP to $800, driven by the fully loaded iPhone XS Max, which costs $1,449.
Another important aspect that could shake product sales is the impact of trade tension with China. While the $749-priced iPhone XR is likely to offer good competition to cheaper local smartphone models in China, investors will be looking at how much it can offer resistance to the demand dent caused by the macro tensions.
During the fourth quarter, revenue is projected to grow 16% to $61.41 billion. Net income will grow 34% to $2.78 per share, according to street consensus.
The stock has an average price target of $239.75. The shares were trading up 1% at $218.43 during the morning trading session on Monday.
Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips
Most Popular
Earnings calendar for the week of March 8
On the heels of lawmakers moving closer to passing the stimulus bill, inflations concerns gripped the market after Federal Reserve chief Jerome Powell at a meeting said the reopening would
Why Costco’s (COST) growth prospects might depend on beating costs, digital lag
Though the retail boom triggered by the pandemic was estimated to be short-lived initially, the shopping spree continued as customers stocked up on essential items, concerned about the persistent market
Gap (GPS) hopes to see a favorable recovery by the second half of 2021
Shares of Gap Inc. (NYSE: GPS) were up 5.8% in afternoon hours on Friday. The stock has gained 103% over the past 12 months. Gap reported mixed results for the
