Apple Inc. (NASDAQ: AAPL) is scheduled to release its fiscal second-quarter financial results after the markets close on Tuesday. The consensus forecast calls for $2.26 in earnings per share (EPS) and $54.54 billion in revenue. The same period of last year reportedly had $2.46 in EPS and $58.02 billion in revenue.
Apple has recovered handily from its March lows as the market recovery has been strong. That said, Apple is running into headwinds that some investors may be ignoring concerning demand for its iPhone models. The COVID-19-induced recession took Apple’s factories down for part of the first quarter, but even as the suppliers and assemblies came back on, the stark weakness at the consumer level seems to be hurting demand for the iPhone.
It’s very possible that the 5G iPhone will have a weak debut, and it may be delayed. That might not be priced into the aggressive recovery that has outperformed gains in the S&P 500.
Most indications point toward Apple’s supply chain being more or less back to normal. The new worry in a recessionary climate is that total iPhone model demand may be weak. Apple had extended its domestic store closures, and the number of unemployed people may be high enough that the 5G iPhone will be delayed later into the holiday season of 2020 or even into 2021. There is even expected to be weak PC demand in the year ahead.
Excluding Tuesday’s move, Apple stock had outperformed the S&P 500 and Dow Jones industrial average with shares down only 2% in the past 52 weeks. Over the past 52 weeks, Apple was up 43%.
Here’s what some analysts had to say ahead of the report:
- Credit Suisse has a Hold rating with a $260 price target.
- Merrill Lynch has a Buy rating and a $310 target price.
- JPMorgan’s Buy rating comes with a $335 price target.
- UBS Group has a Buy rating with a $290 target price.
- Goldman Sachs rates it a Sell with a $236 price target.
- Wedbush has a Buy rating with a $335 target price.
- Bernstein’s Neutral rating comes with a $285 target.
- Nomura has a Hold rating and a $240 price target.
Apple stock traded up about 1% at $291.45 on Thursday, in a 52-week range of $170.27 to $327.85. The consensus price target is $303.15.
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