Apple (AAPL) stock has been a top performer this year. But you likely wouldn’t guess that from looking at its fundamentals.
The consumer electronics giant has posted declining sales for the past two quarters and is on tap to report another drop with its June-quarter results this Thursday. It’s also set to report its third-straight quarter of flat or declining earnings.
Investors likely will focus on commentary for the September quarter when sales and earnings are forecast to return to growth thanks to the release of the iPhone 15 series.
Analysts polled by FactSet expect Apple to earn $1.19 a share, down 1% year over year, on sales of $81.7 billion, down 2%, in the June quarter.
Apple Stock ‘Boring,’ ‘Lacks Pizzazz’
“Apple is the most ‘boring’ buy-rated stock,” Jefferies analyst Andrew Uerkwitz said in a recent note to clients. “It lacks a focus on ‘efficiency’ and buzzwords such as cloud or AI.”
He added, “What Apple lacks in investor pizzazz, it makes up for with consistency. Its moat has been, remains, and will be its ability to integrate software services with its hardware that builds a regular replacement cycle, ability to slowly raise prices, and take share. This consistency is what makes it a buy-rated stock — especially in an uncertain economic environment.”
Year to date through Thursday’s close, Apple stock is up 49%. It is trading just below its all-time high of 198.23, reached on July 19.
In afternoon trades on the stock market today, Apple stock climbed 1.5% to 196.04.
IPhone And Services Are Business Drivers
The two most important drivers of Apple stock are the iPhone and services, Uerkwitz said. That might change early next year when the company launches its mixed-reality headset, Apple Vision Pro, he said.
Uerkwitz rates Apple stock as buy with a price target of 225.
However, D.A. Davidson analyst Tom Forte believes Apple stock has gotten ahead of itself. He rates Apple as neutral with a price target of 185.
Apple stock is trading at a premium to its three-year average multiples for earnings and sales, Forte said in his note to…