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Apple (AAPL) Gains But Lags Market: What You Should Know

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Best Buy (BBY) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
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Apple (AAPL) closed at $218.24 in the latest trading session, marking a +0.27% move from the prior day. This change lagged the S&P 500's 0.54% gain on the day. Elsewhere, the Dow gained 0.71%, while the tech-heavy Nasdaq added 0.76%.

Heading into today, shares of the maker of iPhones, iPads and other products had gained 1.12% over the past month, outpacing the Computer and Technology sector's gain of 0.87% and lagging the S&P 500's gain of 1.53% in that time.

Investors will be hoping for strength from AAPL as it approaches its next earnings release, which is expected to be November 1, 2018. The company is expected to report EPS of $2.77, up 33.82% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $61.17 billion, up 16.33% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.76 per share and revenue of $263.85 billion. These totals would mark changes of +27.69% and +15.1%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AAPL. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.66% higher within the past month. AAPL is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note AAPL's current valuation metrics, including its Forward P/E ratio of 18.53. For comparison, its industry has an average Forward P/E of 18.49, which means AAPL is trading at a premium to the group.

Also, we should mention that AAPL has a PEG ratio of 1.92. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Mini computers industry currently had an average PEG ratio of 1.92 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 14, which puts it in the top 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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