Investors aren’t expecting much from Apple and that’s usually good for the stock
crazyfrog last edited by
Wall Street isn’t expecting blowout earnings for Apple, which could be the best thing for the stock, according to Citi.
The firm said the Street’s estimates for Apple’s fourth-quarter earnings are in the middle of the guidance range but the lowered expectations bode well for the stock. Citi sees a 15% gain in the stock over the next year as its service business outperforms, surprising investors that have cooled on the shares.
“We believe lowered expectations augur well for share price appreciation in the coming months,” said Citi’s Jim Suva said in a note to clients on Thursday.
Citi is expecting fourth-quarter revenue of $62.5 billion (consensus $62.8 billion) and earnings per share of $2.82, in line with consensus estimates. Apple said it is expecting revenue between $61 billion to $64 billion. However Suva said the tempered expectations are the best thing for the stock, which is up nearly 40% this year.
“We expect tariffs and broader global macro to weigh on iPhone unit sell through in December, albeit the more attractive price points on iPhone 11 (vs its predecessor) should help to provide some offsets,” said Suva.
Suva is bullish on Apple’s services business on the heels of its Apple TV+ launch.
“We expect Apple’s Services offerings to boost investor sentiment ahead and remain optimistic on Apple services with Apple Arcade (launched recently) & Apple TV+ to launch in November at attractive price points,” Suva added.
The firm has a buy rating and a $250 price target on the stock. Apple closed at $220.82 on Thursday.
Shares of Apple rose 1.5% in premarket trading.
supermario last edited by
Isn't this just a basic thing? Anything below expectations will trigger more fuss, and anything above expectations will trigger disappointment. What's new?
hola55 last edited by
Well, duh. It's a lot easier to surprise investors when they aren't expecting much.
elixir last edited by
Perhaps investors are looking more favourably towards apple due to the lower prices of the latest model.
bell last edited by
In the end, it's all about the numbers.
The title actually got approved?
@supermario I know right. Like, what were they expecting?
@hola55 Yeah. This is like the basics of everything.
pokemon last edited by
I think the iPhone 11 is a lot more attractive due to its pricepoint.
hola55 last edited by
@harrypotter It's like the element of surprise.