Apple (AAPL) recently encountered a challenging week anticipating the iPhone 15 launch.
Shares declined for several days over concerns about potential disruptions in AAPL’s sales in China. This is due to China’s government essentially banning public officials from using iPhones at work.
However, it’s essential to weigh this against the positive impact of AAPL’s iPhone 15 launch. By the way, can you believe they’re now on the fifteenth one?! This is exciting for both consumers and investors.
It’s also important to remember that AAPL’s shares have seen surges on both a year-to-date and year-over-year basis. They also maintain a strong balance sheet and earnings history…
From a fundamental perspective, concerns about the iPhone ban for Chinese government employees must be assessed, and the apprehension is undoubtedly warranted. It’s been estimated that this ban may impact less than 500,000 devices, a relatively small amount compared to the approximately 45 million iPhones projected to be sold in China over the next year.
China represents roughly 19% of AAPL’s revenue, which has played a significant role in supporting Chinese jobs. Therefore, it is actually unlikely that the Communist Party would take drastic action against AAPL.
While concerns loom over AAPL’s business in China, it’s important to remember that China plays a notable role in its success. As investors, however, we also need to remember that AAPL has a proven history of adapting to the global market, Wall Street sentiment, and broad market issues.
Currently, AAPL’s stock is up year-to-date by 37.20% but is trading near the middle of its existing 52-week range; this means the stock is already showing healthy returns but still has room to grow and prosper. AAPL has a positive 20/200 day SMA (simple moving average), huge TTM (trailing twelve-month) momentum growth, and an ROE (return on equity) of more than 160%. Although losing a small chunk of its $3 trillion market capitalization, AAPL still carries a free cash flow of just over $90 billion.
AAPL 52-week range:
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For its Q2 2023 earnings call, AAPL reported an EPS of $1.26 per share vs. $1.19 per share as expected by analysts, beating their projections by a 5.49% margin; they met revenue projections evenly. During the same period, AAPL posted year-over-year growth in net income (+2.26%), EPS (+5%), and net profit margin (+3.71%). For the current fiscal quarter, AAPL is expected to report $90.3 billion in sales at $1.36 per share, with a 3-5 year EPS growth rate of 21.5%. They’re slated to report again on October 26th.
AAPL has more to offer as well, with its annual dividend yield of 0.54% and a quarterly payout of 24 cents ($0.96/year) per share. While the bonus that comes with AAPL being a decent income stock, there are plenty of reasons, as I’ve mentioned, that cause bullish sentiment among bloggers and analysts. With a 10-day average volume of 61 million shares, AAPL has a median price target of $202, with a high of $240 and a low of $160; this represents a potential price jump of just about 35% from where it is currently. As assigned by analysts, AAPL has 11 strong buy ratings, 20 buy ratings, and 11 hold ratings.
Investors may be tempted to sell their shares due to the recent developments, but it’s crucial to recognize that AAPL’s success doesn’t solely rely on one product—not even the iPhone. AAPL has consistently demonstrated its ability to innovate and adapt to changing environments, a quality that has contributed to
its remarkable growth over several decades. This adaptability suggests that AAPL will continue to find new avenues for growth, even while facing challenges such as those posed by the China-related situation.
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