Apple stock price in search of next big thing ahead of Q2 results

Having drifted sideways for eight months, Apple’s stock is in sore need of a catalyst to drive it higher. Can upcoming results provide this?

When does Apple report earnings?

Apple’s second fiscal quarter (Q2) earnings are published on 28 April, after market close.

Apple earnings – what does Wall Street expect?

Apple is expected to report adjusted earnings per share (EPS) of 99.1 cents, up 55% year-on-year (YoY), while revenues are forecast to rise 32.6% to $77.4 billion. Apple has beaten on both these metrics in all eight of the last quarterly results.

It will be a busy week for Apple, with earnings swiftly followed by new product releases on Friday. It looks to have been a great quarter for hardware as growth in device sales outpaces that of services, returning Apple to its winning ways as a device seller to consumers of all types. But like many tech firms, it is struggling to find a big catalyst to enthuse shareholders as in the old days. An increase in the dividend or a return to guidance might do the trick, helping to rescue a somewhat moribund stock price.

How to trade Apple’s earnings

32 analysts currently rate Apple as a ‘buy’, with nine ‘holds’ and just three ‘sells’, while the median target price is $151.19 versus a current $134.46 (as of 26 April). While the average move on results day is 4.06%, current options pricing points towards a move of 3.7%.

Apple stock price – technical analysis

Aside from the spike in January, Apple stock has gone nowhere since the beginning of September 2020. However, there has been a general trend of higher lows in that time - in November and March - indicating willingness to buy on weakness. Gains of late have stalled below $135, with a lack of momentum to drive the price on to $140 and then $145. This consolidation will likely resolve in the direction of the longer-term uptrend, although a break below $121 would be considered a bearish development in the short term.

Apple searches for the spark to reignite rally

It is an odd thing to see Apple lag behind even as indices sit at all-time highs (and it is important not to exaggerate – the stock is only 7% below its peak from January). But big tech names have struggled to justify their valuations of late, and Apple is no different. It is to be hoped that this quarter’s earnings will provide the spark, although that is far from certain.

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