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Apple (AAPL) Stock Remains a Buy at New High

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Apple (AAPL - Free Report) shares jumped Wednesday to touch yet another new high. Aside from buzz surrounding its new iPhones and its updated Apple Watch, Apple stock looks like a buy even as its stock price continues to climb.

Overview & Recent News

Apple has bet that consumers want larger phones, geared toward entertainment and media, and that they will be willing to pay as much as $1,449 for these devices. Yet Apple knows it must stand out in different ways.

CEO Tim Cook recently tried to distinguish Apple from some of its tech giant counterparts. Without naming them, Cook took a shot at the likes of Facebook (FB - Free Report) and Google (GOOGL - Free Report) for their handling of user data. “The narrative that some companies will try to get you to believe is: 'I've got to take all of your data to make my service better.' Well, don't believe them,” Cook told Vice News Tuesday.

Cook went on to say that Apple “collect as little data as possible” and said he views privacy as "one of the most important issues of the 21st century." Plus, as Google, Facebook, and Amazon (AMZN - Free Report) face increased scrutiny, Apple’s chief executive noted that “some level of government regulation is important” to help make sure tech companies create products that are "great for society."

Apple’s CEO did not mention any of these companies by name, nor does it seem like he wishes anything bad on his peers. But clearly Apple is making the case that it stands out as pro-privacy with the issue likely to gain steam. Wednesday also marks the first day that Apple officially requires every entity that utilizes its App Store to have a privacy policy.

Looking Ahead

Apple’s privacy push might seem trivial, but it could help prevent the tech powerhouse from facing massive government scrutiny or intervention. Along with its privacy focus, Apple has expanded beyond the device that helped it become the first publicly listed U.S. company to reach $1 trillion in market value.

The iPhone will remain Apple’s single largest money maker for the foreseeable future, but the company’s Services unit, made up of AppleCare, Apple Pay, and Apple Music, has grown. Last quarter this key division’s revenues jumped 31% to $9.548 billion. Apple Pay competes against Square (SQ - Free Report) and PayPal (PYPL - Free Report) , while Apple Music has quickly become a legitimate Spotify (SPOT - Free Report) rival—especially in the U.S.

Investors should be pleased as the fintech industry and the streaming music market look poised to expand. Plus, Apple’s less-talked-about “Other Products” unit, which features AirPods, Apple TV, Apple Watch, Beats products, and HomePod, also climbed 37% to reach $3.74 billion. And Apple’s plan to enter the streaming TV market could prove to be a game-changer for the company as its service could easily thrive alongside Netflix (NFLX - Free Report) , Amazon, Hulu, and Disney (DIS - Free Report) .

 

Apple saw its stock price pop roughly 2% Wednesday to touch a new all-time high of $233.47 per share. The move extends AAPL’s impressive run since the start of the year that has seen it crush the S&P 500 and remain one of the Dow’s top performers along with Nike (NKE - Free Report) and Microsoft (MSFT - Free Report) .

Projections

Moving on, our current Zacks Consensus Estimate is calling for Apple’s fiscal fourth-quarter revenues to jump nearly 17% to hit $61.40 billion. At the other end of the income statement, Apple is expected to see its adjusted Q4 earnings surge by roughly 33.8% to hit $2.77 per share. Meanwhile, Apple’s full-year EPS figure is projected to climb by 27.7%.

Bottom Line

Apple has earned three earnings estimate revisions for Q4 over the last 30 days, with 100% agreement to the upside. During this same stretch, the company has also received three upward revisions for its full-year and six for fiscal 2019, against zero downward changes.

This strong earnings revision trend helps Apple earn a Zacks Rank #2 (Buy). The company also boasts an “A” grade for Momentum and a “B” for Growth in our Style Scores system. Therefore, Apple stock might be worth buying even at its new highs because it looks poised to grow and expand into booming industries.

Apple is scheduled to release its Q4 earnings results on Thursday, November 1.

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