Not seeing the Apple run into earnings. Apple a victim of rumor and innuendo, as the shorts play the diminishing margins play. Down 18 on Friday does not set up well for this week, and one has to wonder if even great earnings will stem the tide of Wall Street negativity. Will the innovation adn pipeline issues go away? Will the competition and market share issues disappear? Will the shroud of Steve Jobs passing ever cease?
I love Apple and I think it is one of the ebst companies int he world, but as a hardware supplier, they are prone to margin and market share issues, unlike GOOG and to some degree PCLN and AMZN. Unless Apple can stem the attacks on margin and future product rollout, we may see continued price pressure and P/E compression.
AAPL has a tough comp; where a beat of estimates may not surpass earnings on a YOY basis. However, lower estimates is what I would want to see if I hold a stock through the earnings release. Runups usually sell off even with a slight beat. AAPL has been hammered from its high, so an earnings beat could pop the stock price $100 in a short amount of time. I'm looking 3-5 years out and am willing to ride out the volatility, but it will be interesting to watch. Options may be something to look into for this stock.
Yes you are correct P/E can contract or expand but not in a 25% reduction in 3 months... It just doesnt happen..... And with all that cash in the bank they can buy companies that would increase their P/E ratio without adding debt.... Overnight