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

Zacks Equity Research
Weyerhaeuser (WY) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, Apple (AAPL) closed at $201.24, marking a +0.61% move from the previous day. This change outpaced the S&P 500's 0.12% gain on the day. Meanwhile, the Dow lost 0.08%, and the Nasdaq, a tech-heavy index, added 0.54%.

Coming into today, shares of the maker of iPhones, iPads and other products had gained 3.86% in the past month. In that same time, the Computer and Technology sector gained 5.12%, while the S&P 500 gained 3.68%.

Investors will be hoping for strength from AAPL as it approaches its next earnings release, which is expected to be July 30, 2019. In that report, analysts expect AAPL to post earnings of $2.12 per share. This would mark a year-over-year decline of 9.4%. Our most recent consensus estimate is calling for quarterly revenue 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.09% lower. AAPL is currently a Zacks Rank #3 (Hold).

Digging into valuation, AAPL currently has a Forward P/E ratio of 17.44. This valuation marks a premium compared to its industry's average Forward P/E of 10.05.

Also, we should mention that AAPL has a PEG ratio of 1.7. 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 industry currently had an average PEG ratio of 2.41 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 10, putting it in the top 4% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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