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

Zacks Equity Research
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Apple (AAPL) closed the most recent trading day at $194.81, moving +1.16% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.04%. Elsewhere, the Dow lost 0.05%, while the tech-heavy Nasdaq lost 0.01%.

Prior to today's trading, shares of the maker of iPhones, iPads and other products had gained 3.69% over the past month. This has outpaced the Computer and Technology sector's loss of 1.99% and the S&P 500's gain of 0.34% in that time.

Wall Street will be looking for positivity from AAPL as it approaches its next earnings report date. In that report, analysts expect AAPL to post earnings of $2.10 per share. This would mark a year-over-year decline of 10.26%. Meanwhile, our latest consensus estimate is calling for revenue of $53.46 billion, up 0.36% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.48 per share and revenue of $256.93 billion. These totals would mark changes of -3.61% and -3.26%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AAPL. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 remained stagnant. AAPL is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that AAPL has a Forward P/E ratio of 16.78 right now. For comparison, its industry has an average Forward P/E of 10.88, which means AAPL is trading at a premium to the group.

Also, we should mention that AAPL has a PEG ratio of 1.63. 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. The Computer - Mini computers was holding an average PEG ratio of 2.31 at yesterday's closing price.

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 includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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