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

Zacks Equity Research

In the latest trading session, Apple (AAPL) closed at $240.51, marking a +1.73% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.69%. At the same time, the Dow added 0.22%, and the tech-heavy Nasdaq gained 0.91%.

Prior to today's trading, shares of the maker of iPhones, iPads and other products had gained 6.99% over the past month. This has outpaced the Computer and Technology sector's loss of 0.49% and the S&P 500's loss of 0.61% in that time.

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, our latest consensus estimate is calling for revenue of $62.57 billion, down 0.52% from the prior-year quarter.

Any recent changes to analyst estimates for AAPL should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.19% lower within the past month. AAPL currently has a Zacks Rank of #4 (Sell).

Investors should also note AAPL's current valuation metrics, including its Forward P/E ratio of 18.19. Its industry sports an average Forward P/E of 8.98, so we one might conclude that AAPL is trading at a premium comparatively.

Also, we should mention that AAPL has a PEG ratio of 2.08. 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 2.08 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 182, putting it in the bottom 29% 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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