Apple (AAPL) Outpaces Stock Market Gains: What You Should Know

Apple (AAPL) closed the most recent trading day at $126.36, moving +1.03% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.75%. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq added 10.36%.

Coming into today, shares of the maker of iPhones, iPads and other products had lost 12.48% in the past month. In that same time, the Computer and Technology sector lost 8.72%, while the S&P 500 lost 5.98%.

Investors will be hoping for strength from Apple as it approaches its next earnings release. On that day, Apple is projected to report earnings of $1.93 per share, which would represent a year-over-year decline of 8.1%. Our most recent consensus estimate is calling for quarterly revenue of $120.8 billion, down 2.54% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.18 per share and revenue of $403.75 billion. These totals would mark changes of +1.15% and +2.39%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Apple. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.85% lower. Apple currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Apple has a Forward P/E ratio of 20.23 right now. This represents a premium compared to its industry’s average Forward P/E of 7.99.

We can also see that AAPL currently has a PEG ratio of 1.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. AAPL’s industry had an average PEG ratio of 2.27 as of yesterday’s close.

The Computer – Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 226, which puts it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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