Will Ap­ple’s earn­ings re­port be a turn­ing point for its weak 2016?

Financial Mirror (Cyprus) - - FRONT PAGE -

Ap­ple Inc. (NAS­DAQ: AAPL) was sched­uled to re­port its fis­cal third-quar­ter fi­nan­cial re­sults af­ter the mar­kets close on Tues­day. This iPhone gi­ant may be one the fa­vorite com­pa­nies in the mar­ket; un­for­tu­nately, it has per­formed poorly so far in 2016. Some are pre­dict­ing weaker sales go­ing into this quar­ter, but the over­whelm­ing an­a­lyst sen­ti­ment is pos­i­tive. Could this be when Ap­ple turns it­self around in 2016?

The con­sen­sus es­ti­mates from Thom­son Reuters call for $1.38 in earn­ings per share (EPS) on $42.09 bil­lion in rev­enue. In the same pe­riod of last year, Ap­ple posted EPS of $1.85 and $49.6 bil­lion in rev­enue.

This com­pany evo­lu­tion­ized per­sonal tech­nol­ogy with the in­tro­duc­tion of the Mac­in­tosh in 1984, and it is among the lead­ers in the world in in­no­va­tion with the iPhone, iPad, Mac, Ap­ple Watch and Ap­ple TV. Ap­ple’s four soft­ware plat­forms — iOS, OS X, watchOS and tvOS — pro­vide seam­less ex­pe­ri­ences across all Ap­ple de­vices and em­power peo­ple with break­through ser­vices, in­clud­ing the App Store, Ap­ple Mu­sic, Ap­ple Pay and iCloud.

One ad­van­tage for in­vestors with a good time hori­zon is that the tepid num­bers the com­pany has posted over the past two quar­ters and the so-so guid­ance largely have been fac­tored in. Also some of the big-name sellers like Carl Ic­ahn have been dis­closed.

A re­cent RBC re­port noted that while this quar­ter should be in line with the lower ex­pec­ta­tions, the po­ten­tial for some gross mar­gin ex­pan­sion in the next quar­ter is pos­si­ble, and cur­rency head­winds may start to abate as well. RBC also thinks the iPhone 7 up­grade cy­cle could be a pos­i­tive, and with the over­all iPhone de­clines mod­er­at­ing, and an out­stand­ing val­u­a­tion, there is sup­port for the stock.

Ahead of the earn­ings re­port, an­a­lysts weighed in on per­haps one of the most fol­lowed stocks in the mar­ket:

- BGC down­graded it to Sell from Hold and low­ered the price tar­get to $85 from $110.

- Maxim has a Buy rat­ing and raised price tar­get to $168 from $157.

- Baird re­it­er­ated an Out­per­form with a $110.

- RMO Cap­i­tal Mar­kets re­it­er­ated an Out­per­form rat­ing with a $116 price tar­get.

- Need­ham re­it­er­ated a Buy rat­ing with a $150 price tar­get.

- Wells Fargo



re­it­er­ated an Out­per­form rat­ing.

- No­mura re­it­er­ated a Buy rat­ing with a $120 price tar­get.

- Piper Jaf­fray re­it­er­ated an Over­weight rat­ing with a $153 price tar­get.

- Bern­stein has an Out­per­form rat­ing and low­ered its price tar­get to $125 from $135. - Bar­clays re­it­er­ated a Buy rat­ing. - Credit Suisse re­it­er­ated a Buy with a $150 price tar­get.

- Goldman Sachs has a Buy rat­ing with a $124 price tar­get.

So far in 2016, Ap­ple has un­der­per­formed the broad mar­kets, with the stock down nearly 7%. Over the past 52 weeks, the stock is down 20%.

Shares of Ap­ple were trad­ing at $97.65 on Tues­day, with a con­sen­sus an­a­lyst price tar­get of $122.37 and a 52-week trad­ing range of $89.47 to $123.91. (Source: 24/7 Wall St.com)


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