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Apple (AAPL) Gains As Market Dips: What You Should Know

Zacks Equity Research

Apple (AAPL) closed at $227.06 in the latest trading session, marking a +0.02% move from the prior day. This move outpaced the S&P 500's daily loss of 0.45%. Elsewhere, the Dow lost 0.36%, while the tech-heavy Nasdaq lost 0.33%.

Coming into today, shares of the maker of iPhones, iPads and other products had gained 6.44% in the past month. In that same time, the Computer and Technology sector gained 1.8%, while the S&P 500 gained 0.59%.

Wall Street will be looking for positivity from AAPL as it approaches its next earnings report date. This is expected to be October 30, 2019. The company is expected to report EPS of $2.83, down 2.75% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $62.57 billion, down 0.52% from the year-ago period.

Investors might also notice recent changes to analyst estimates for AAPL. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.25% lower. AAPL is currently a Zacks Rank #4 (Sell).

In terms of valuation, AAPL is currently trading at a Forward P/E ratio of 17.46. For comparison, its industry has an average Forward P/E of 9.1, which means AAPL is trading at a premium to the group.

We can also see that AAPL currently has a PEG ratio of 2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Mini computers stocks are, on average, holding a PEG ratio of 2 based on yesterday's closing prices.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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