Sign InApple Inc. (AAPL) Stock Analysis: Undervalued Stock with Positive Momentum
Summary
On October 31, 2023, Apple Inc.'s stock showed positive momentum, with potential for a rebound, a strong buy recommendation, and investors advised to monitor the upcoming earnings report and recent news for potential significant influence on stock price.
Stock Analysis for Apple Inc (AAPL)
Apple Inc.'s latest closing price was $170.77 on October 31, 2023. This represented a modest increase of $0.48 (0.28%) from the previous trading day. The trading volume for this period was 21.08 million, lower than the average volume of 59.34 million.
Technical Analysis
The Relative Strength Index (RSI14), a momentum oscillator that measures the speed and change of price movements, was 27. An RSI below 30 is typically seen as an indication that a stock may be oversold, suggesting a potential buying opportunity. Apple's Moving Average Convergence Divergence (MACD 3-month) is 0.72, indicating a bullish trend.
The stock is trading below both its 50-day moving average ($176.72) and the 200-day moving average ($170.89). A stock trading below these benchmarks is often seen as bearish. The average true range (ATR), a measure of volatility, stands at 1.89. The support and resistance levels, essential for identifying buy and sell signals, are denoted at $170.43 and $177.97 respectively.
Fundamental Analysis
Apple's market cap is approximately $2.69 trillion, signifying a massive and stable market presence. The company's Earnings per Share (EPS) is $5.96 and is trading at a Price to Earnings ratio (PE) of 28.84. This PE ratio is relatively high, indicating that investors are willing to pay a higher share price today because of growth expectations in the future. The discounted cash flow (DCF) is $173.35, slightly higher than the current price, suggesting the stock might be undervalued.
Outlook and Forecast
Analysts provide a range of target prices for Apple stock with a target low at $110 and a target high of $240, with the consensus at $190.63. The current price falls significantly below the median target of $195, implying an upward potential. The analyst consensus is a "Buy" with 22 'buys', 9 'holds', and one 'sell' rating.
Relevant News and Events
Recently published news highlights include discussions about how Apple's AI spending and deployment differ from their rivals. Apple has been mostly quiet, but it has made many AI acquisitions, indicating a strategic interest in this area. There is also news of Apple stock being in a $300 billion rut since its previous earnings report. Investors will be eagerly watching the upcoming report on November 2, 2023, for any positive turnaround. A massive lawsuit related to iPhone's battery performance is also ongoing, which might have an impact on the investor sentiment. On a positive note, Apple plans to add a blood-pressure sensor and sleep apnea detection to the 2024 Apple Watch alongside a new health coaching service, suggesting potential expansion in its product portfolio and health-tech space.
Conclusion and Recommendation
Apple Inc's stock appears to be undervalued based on the DCF model. The stock appears to be oversold, as suggested by the RSI indicator, and there is potential for positive momentum based on MACD.
Based on the historical technical charts, analyst consensus, and AI spending & deployment strategies, Apple's stock shows potential for a rebound, with buying momentum poised to increase over the next week. There may be short-term pressure due to the lawsuit, but new product introductions and strategies may outweigh these concerns in the long term.
Due to these factors, the recommendation for Apple Inc. (AAPL) stock is a BUY. Investors are advised to keep an eye on the forthcoming earnings report and the strategic initiatives mentioned in the recent news because both factors could significantly influence Apple's stock price.
