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Apple (AAPL) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Apple (AAPL) closed at $205.21 in the latest trading session, marking a +0.94% move from the prior day. This change outpaced the S&P 500's 0.02% gain on the day. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, added 0.17%.

Coming into today, shares of the maker of iPhones, iPads and other products had gained 4.71% in the past month. In that same time, the Computer and Technology sector gained 6.42%, while the S&P 500 gained 4.82%.

Investors will be hoping for strength from AAPL as it approaches its next earnings release, which is expected to be July 30, 2019. The company is expected to report EPS of $2.12, down 9.4% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $53.31 billion, up 0.09% from the year-ago period.

AAPL's full-year Zacks Consensus Estimates are calling for earnings of $11.47 per share and revenue of $256.48 billion. These results would represent year-over-year changes of -3.69% and -3.43%, respectively.

Investors should also note any recent changes to analyst estimates for AAPL. These revisions help to show the ever-changing nature of near-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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% lower. AAPL is currently a Zacks Rank #3 (Hold).

Looking at its valuation, AAPL is holding a Forward P/E ratio of 17.73. This represents a premium compared to its industry's average Forward P/E of 10.34.

We can also see that AAPL currently has a PEG ratio of 1.72. 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 2.46 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 9, putting it in the top 4% 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.

To follow AAPL in the coming trading sessions, be sure to utilize Zacks.com.


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