Financial Trading Blog
Stock of the day 25/01/2016 – Apple Inc
Flash forward 12 months and the situation is far from rosy for the tech giant; the company releases its Q1 2016 results on Tuesday.
Things haven’t looked too good for Apple since it released its Q4 2015 earnings release at the end of last October. Whilst the company bested earnings per share estimates (at $1.96 against the $1.88 forecast) and posted a strong quarterly revenue of $51.5 billion, the all-important iPhone sales figures fell slightly short of expectations at 48.04 million, with Chinese revenue rising 99% year-on-year but falling 5% quarter-on-quarter.
(Source: IT-Finance.com 25/01/2016)
Initially these figures helped the stock climb to a 4 month high of $123.81, only for Apple’s fall to resume as November got underway. A bounce back at the end of that month then saw the stock rise to just under the $120, only for a late in the year-plunge and a start of 2016 nightmare (inspired by, amongst other things, reports that the company was slowing down iPhone production), to leave the stock back at its Black Monday lows of around $93. Since then the stock has recovered slightly, Apple sitting at a current trading price of $101.43.
In terms of its Q1 results on Tuesday, there are 2 main questions. Firstly, just how badly have Chinese sales been affected by the country’s continued economic slowdown? Secondly, and directly related, will the iPhone see its first ever year-on-year decline in units sold, with 74.5 million (the amount sold in Q1 2015) the figure to beat? Revenue, meanwhile, is forecast between $75.5 billion and $77.5 billion, as per Apple’s own estimates announced in October.
Apple Inc has a consensus rating of ‘Buy’ with an average target price of $140.67.
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