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Apple (AAPL) Dips More Than Broader Markets: What You Should Know

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Apple (AAPL - Free Report) closed at $312.68 in the latest trading session, marking a -1.35% move from the prior day. This change lagged the S&P 500's daily loss of 0.15%. At the same time, the Dow added 0.11%, and the tech-heavy Nasdaq lost 0.24%.

Prior to today's trading, shares of the maker of iPhones, iPads and other products had gained 13.26% over the past month. This has outpaced the Computer and Technology sector's gain of 7.03% and the S&P 500's gain of 3.88% in that time.

Wall Street will be looking for positivity from AAPL as it approaches its next earnings report date. This is expected to be January 28, 2020. On that day, AAPL is projected to report earnings of $4.53 per share, which would represent year-over-year growth of 8.37%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $87.74 billion, up 4.07% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $13.16 per share and revenue of $275.27 billion, which would represent changes of +10.68% and +5.8%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for AAPL. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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. The Zacks Consensus EPS estimate has moved 0.62% higher within the past month. AAPL currently has a Zacks Rank of #2 (Buy).

Digging into valuation, AAPL currently has a Forward P/E ratio of 24.09. For comparison, its industry has an average Forward P/E of 17.56, which means AAPL is trading at a premium to the group.

Investors should also note that AAPL has a PEG ratio of 2.29 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers industry currently had an average PEG ratio of 3.5 as of yesterday's close.

The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 110, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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