What I am sharing with you are somewhat random observations about a topic that has been very importa...
Apple Inc Stock & the iPhone 8
09/12/2017 3:01 am EST
If Apple’s forecasts are correct, the actual sales figures will boost the company’s share price dramatically. With Apple expected to produce massive quantities of iPhones in 2017-1818, the company could be preparing for a huge round of sales, writes Shiran Herzberg of eToro.
(Sponsor content) Apple stock was trading at $158.89 per share at 3 pm on September 8. As the world’s most valuable company, Apple Inc (AAPL) has an approximate market cap of $820.786 billion with a price/earnings ratio of 18.04 and an $8.81earnings per share.
The stock has a dividend of $2.52 and a yield of 1.56%. The 1-year target estimate price of Apple stock is $171.41 per share, with a 52-week low of $102.53, and a 52-week high of $164.94. For the year-to-date, Apple has appreciated sharply, despite rather lackluster performance leading up to its iPhone 8 release. On 3 January 2017, Apple was trading at $116.15 per share, and it has appreciated $42 since then. This represents a year-to-date performance of approximately 36%.
Recent earnings reports with Apple provide plenty of optimism. Between Q3 2016, and Q3 2017, Apple Inc has generated positive earnings surprises across the board. Thomson Reuters analysts reported the following actual earnings versus estimated earnings for AAPL:
- In Q3 2016, estimated earnings were $1.66 per share, with actual earnings of $1.67 per share
- In Q4 2016, estimated earnings were $3.21 per share, and actual earnings were $3.36 per share
- In Q1 2017, estimated earnings were $2.02 per share, and actual earnings were $2.10 per share
- In Q2 2017, estimated earnings were $1.57 per share, and actual earnings were $1.67 per share
- For Q3 2017, the estimated earnings are $1.88 per share and the next earnings date is slated for October 23 – 27, 2017
How Well Will Apple’s New iPhone 8 Perform?
According to Kensho analysis, between 2007 and 2016, Apple shares routinely close lower some 80% of the time when the latest iPhone product is released to the market. However, not everyone is convinced that Apple stock will continue on its relentless growth path moving forward. According to Gene Munster – a notable Apple analyst, Apple stock could retreat by as much as 10% over the next 3 months.
He made the comments on Tuesday, 5 September 2017 on CNBC. Apple’s performance during its product cycles reflect the stock typically tapers off, and there is little to suggest that current trends will move contrary to that. The latest iPhone is Apple’s answer to the Samsung S8 and other leading Android models. The updated design and full front screen removes the home button from the product to provide maximum visibility and screen size. It is not yet known how expensive the iPhone 8 will be.
Over the past 12 months, Apple has gained 50% +. This performance is notable, given Apple’s annual revenue declines in recent days. Apple has a strict policy of keeping all aspects of its product launches secret. Investors have priced in a solid appreciation of the stock over the past 1 year, because they believe the stock is due for some positive growth. In fact, every time Apple releases an iPhone, the stock price moves sharply. For example, consider the following Apple stock movements and iPhone reveals:
The iPhone 3G resulted in a 2.22% increase stock movement and the iPhone 3G amounted to a -2.17% stock movement on the day of the announcement.
The iPhone 3GS generated a -0.79% return on the day after the announcement
- The iPhone 4 generated a -0.64% return on the day after the announcement, the iPhone 4S generated a -0.56% return on the day of the announcement,
- The iPhone 5 generated a 1.97% return on the day after the announcement
- The iPhone 5S and 5C generated a -2.28% return on the day after the announcement
- The iPhone 6 and 6+ generated a 3.07% return on the day after the announcement
- The iPhone 6S and 6S Plus generated a 2.2% return on the day after the announcement
- The iPhone SE generated a -0.01% return on the day of the announcement.
What Could Happen with Apple Inc Stock?
Apple stock is already enjoying an imperious run of form in 2017. Apple’s market value is up approximately $200 billion + this year, thanks largely to the release of multiple iPhones. On September 12, Apple will release the iPhone 8, and depending on how it is received, the stock could pop. It’s important to remember that iPhones generate the bulk of Apple’s earnings, comprising 63% + of the company’s revenues during 2016 alone.
If Apple’s forecasts are correct, the actual sales figures will boost the company’s share price dramatically. With Apple expected to produce massive quantities of iPhones in 2017 and 2018, the company could be preparing for a huge round of sales. Everything hinges on the performance of iPhone sales, notably the company’s ‘Other’ reporting segment and the Apple Watch enterprise. However, all eyes will be on the iPhone 8 as this will take center stage with the world’s most valuable company.
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