Apple's Stock Has Already Bounced Back After Earnings Results Slightly Missed Expectations

[MacRumors]

Apple's stock has recovered from early week losses incurred after the company's earnings results fell slightly below Wall Street expectations.

Apple shares are currently trading for roughly $148, slightly above Tuesday's closing price of $147.51, set just before the company's earnings report. The stock had dropped to as low as $144.27 on Wednesday, but Apple has bounced back since alongside an overall rise in the S&P 500 index today.

Wall Street remains bullish on Apple heading into the second half of the year, as most analysts think the so-called "iPhone 8" with an OLED display and wireless charging will be a hit among customers. There's also a larger than usual "supercycle" of customers with older iPhone models due to upgrade.

MacRumors obtained research notes from 19 analysts tracking Apple, and 15 of them continue to rate the company's stock as a "buy" or equivalent following the company's second quarter earnings results. All but three analysts believe that Apple's stock price could rise to between $150 and $185.

Apple's stock has been steadily climbing in value since dropping to a 52-week low of $89.47 in 2016, when the iPhone maker reported its first decline in annual revenue since 2001, and its first drop in iPhone sales ever.

AAPL touched $148.20 in intraday trading this morning, a new all-time high. The stock is on pace to top Tuesday's record close of $147.51.

Article Link: Apple's Stock Has Already Bounced Back After Earnings Results Slightly Missed Expectations

 

[MrX8503]

Wish I bought more when it was $90.

 

[BeefCake 15]

Would love to see it at $185!

Not sure why some have a sell recommendation with a good PE ratio as Apple does?

 

[6foot5foot]

Well of course, it's Apple. Duh.

 

[citysnaps]

Not surprised. Stock usually dips down for a bit even with outstanding earnings.

 

[djcerla]

Will go much higher, barring catastrophic macro events.

Investors have rose-tinted glasses, as they see new catalysts of material growth in Services and wearables, and the iPhone 8 supercycle approaching.

Not to mention Warren Buffett speaking of Apple like a teenager in love, a very uncommon sight.

 

[ApfelKuchen]

That post-earnings call "drop" was pretty small to begin with, essentially wiping out just the previous couple of days' gains. It was amusing to watch the headlines in the financial press on Wednesday, blaming the Dow's (small) drop on Apple, even as Apple's price was recouping most of the overnight drop as the day wore on, closing around 0.5% down from Tuesday's close.

One might attribute the drop after Tuesday's close purely on program selling - investors who had determined to "sell on news" regardless of what the results might be.

 

[IJ Reilly]

Here again, financial news is not being reported accurately. The current one-year target consensus for AAPL is $151.44. This is less than 2% higher than its current price. So no, this is not a "bullish" case, but in fact only a very modestly positive one for the stock.

 

[MrX8503]

Will go much higher, barring catastrophic macro events.

Investors have rose-tinted glasses, as they see new catalysts of material growth in Services and wearables, and the iPhone 8 supercycle approaching.

Not to mention Warren Buffett speaking of Apple like a teenager in love, a very uncommon sight.

I'm curious on how much higher it'll go. We're still pretty far away from the iPhone 8 event, but I'm hesitant to increase my position when the stock is at an all time high.

 

[IJ Reilly]

Not surprised. Stock usually dips down for a bit even with outstanding earnings.

Not really. Beating consensus EPS by 10% or better will almost always produce a bounce, provided they haven't announced any other red flags. Most stock behave exactly the same way.

 

[CarlJ]

It seems like it's always that it misses "expectations" (what outsiders are guessing) rather than missing "guidance" (what Apple predicts). Wall Street is weird.

 

[kaneda]

Wish I bought more when it was $90.

You should buy more, but would sell immediately after WWDC announcement.

 

[indiekiduk]

I'm curious on how much higher it'll go. We're still pretty far away from the iPhone 8 event, but I'm hesitant to increase my position when the stock is at an all time high.

don't, you should be selling high, not buying

 

[theMaccer]

BTFD works everytime.

 

[djcerla]

I'm curious on how much higher it'll go. We're still pretty far away from the iPhone 8 event, but I'm hesitant to increase my position when the stock is at an all time high.

It will go to a "ridicolous" valuation compared to today's (like, $165). In absolute terms, the stock's P/E would remain compressed though, fair valuation being around $210.

This said, you know it's time to buy AAPL only when you see its value slashed almost in half. Just don't listen to pundits and to your gut feeling, and push the BUY button when everybody else is running away from the stock, screaming.

 

[BeefCake 15]

You should buy more, but would sell immediately after WWDC announcement.

why?

 

[sransari]

That's great, but no stock is immune to major market corrections and bubble bursts, which is right around the corner.

 

[Cosmosent]

Just think where the company would be if Tim & Phil hadn't Dropped the Ball on the Rollout of what Apple calls "Wide Color" ... OR, if at least one Financial Analyst who covers the company had called them out for such ... my guess, Apple would be trading 10% higher ! ... in other words, their market cap would be $80B higher !!

Kind of a major screw-up by Apple that NO one is really talking about.

 

[firewood]

Wish I bought more when it was $90.

Silly. A better wish is to have bought some when it was under $3 (adjusted), and held on.

 

[IJ Reilly]

That post-earnings call "drop" was pretty small to begin with, essentially wiping out just the previous couple of days' gains. It was amusing to watch the headlines in the financial press on Wednesday, blaming the Dow's (small) drop on Apple, even as Apple's price was recouping most of the overnight drop as the day wore on, closing around 0.5% down from Tuesday's close.

One might attribute the drop after Tuesday's close purely on program selling - investors who had determined to "sell on news" regardless of what the results might be.

You are right, the drop was small, but that really isn't how program trading works. What you are describing is a simple market order. Now, what anyone can do in their brokerage account is put in a stop loss order to sell if the price falls to a selected number. On earnings reports you can expect a lot of stockholders have set them beforehand to protect themselves against a bad report, and some will be triggered if the stock falls by even a little, which in turn, triggers more of them. When I am getting ready to sell I often set up stop loss orders at 1% below the current price. If the stock goes up that day, I raise it the next day to the same margin and I keep doing that until it sells.

 

[BeefCake 15]

Silly. A better wish is to have bought some when it was under $3 (adjusted), and held on.

Wish I had the stocks Forest Gump had in the movie

 

[78Bandit]

The focus on Apple's short-term stock price fluctuations is meaningless. Steve Jobs didn't care about future share price, he cared about future products. Make great products and the profit will follow was his philosophy.

Tim Cook seems to be the polar opposite. Keep trumping statistics about how well Apple has performed in the past to prop up the share price. Come up with excuses why iPhone sales dropped this quarter. Steve wouldn't have cared about the drop other than to see if there was a product issue that needed to be improved.

Seth Godin says "Profit is often a measure of short-term imbalances or pricing power, not value." That is very true, particularly in a potentially commoditized market like technology. Steve Jobs was always one step ahead of the competition. He kept the short-term imbalances tipped in favor of Apple by constant innovation and improvement. He focused on anticipating what product the customer would want to buy a year or more in the future. He instinctively knew when technology would mature into a product ready for consumer use. Apple always had something new and exciting; Steve Jobs' "One More Thing" moment at the end of a keynote.

The old product-focused Apple died with Steve Jobs. Tim Cook is more akin to Microsoft's Steve Balmer. Without some new product category innovation in the near future I suspect Apple's long-term stock chart will look significantly flatter in ten years than it has over the past ten.

 

[BeefCake 15]

Tim Cook is more akin to Microsoft's Steve Balmer. Without some new product category innovation in the near future I suspect Apple's long-term stock chart will look significantly flatter in ten years than it has over the past ten.

I keep seeing this comparison as a sensationalist comment but I don't think people know how bad Balmer was before they compare him to Tim. Not that Tim doesn't have faults, innovation indeed being one.

 

[a.gomez]

Meh, I'll criticize Apple for tons of stuff but how well they meet random analyst expectations is not one of the. They just want Apple to make "X" so they can make "Y". Apple is profitable.

 

[Rogifan]

The stock was only slightly down the day after earnings. Typical Wall Street overreaction right after earnings are announced. Also I think Warren Buffett had some positive things to say about Apple today so that might be driving the stock up.