Apple Inc. ’s stock price is back into triple digits, and has risen above the $100 mark for the first time since June 6th. Apple’s stock has rallied through the second half of the week, and does not appear to be tied to any specific news events.
iPhone sales – to grab all attention
Apple is due to report its earnings results on July 26. All eyes are on the iPhone maker to see if it can meet expectations after ending its 13-year record revenue streak last quarter. The stock of the iPhone maker dropped to levels below $90 after the lackluster sales of iPhone. Tim Cook – the Chief Executive of the smartphone making giant – characterized the market response as a ‘huge overreaction’.
Since then, investors sentiment has fluctuated, rising and falling throughout June. The sales of iPhone will continue to be the focal point for fiscal Q3 as many question the continued growth (or lack of growth) prospects of Apple’s smartphone range. The sales of iPhone SE may somewhat assist in uplifting the figures.
However, there are still investors who do not expect a return to unit growth, at least until late in 2017 when Apple Inc. reveal its next major flagship. But, due to its similarity to the existing iPhone 6s, there are low expectations for the iPhone 7 to bring a strong sales upgrade cycle in 2016.
Is Apple undervalued?
Apple shares had steadily dropped since the second half of 2015 though there was a short-lived rebound in March and April. The iPhone making firm is still trading for markedly lower than its year ago price of around $132, but some analysts believe the stock is undervalued and is due for a breakout.
A few weeks ago, Apple’s stock was listed as a “buy” with a target price of $185 by analyst Brian White of Drexel Hamilton. In recent months, other firms such as S&P Capital IQ, and Goldman Sachs have set lower price targets between $120 and $130 in recent months. Currently, the stock has an average rating of Buy and an average price target of $126.55.
Apple Inc. will release its fiscal third-quarter earnings results on Tuesday, July 26 at 1:30 p.m. Pacific Time, followed by a conference call to discuss the report at 2:00 p.m. Pacific Time. Apple has guided revenue between $41 billion and $43 billion for the fiscal Q3 quarter. The gross margin is expected around 37.5% and operating expenses of approx. $6 billion. Based on Apple’s guidance, the third-quarter will likely mark a year-over-year decline.
On Monday, Apple shares closed up 1.06% at $99.83. Year to date, the stock is down almost 7% while in the last one-year, it is down almost 23%. The stock has a 52-week high of $132.97 and a 52-week low of $89.47.