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Apple Inc.: Hold in the Short-Term, Buy for Long-Term Investors as Analysts Predict Fluctuations and Growth Potential

StockInvest.us, 3 weeks ago

Apple Fundamental Analysis

Apple Inc., listed on NASDAQ, has a considerable market capitalization of $2.83 trillion, illustrating its dominant status within the industry. The tech giant, known for its innovative products and services, holds the third-largest market share in online retail, reflecting the popularity of its devices and robust e-commerce performance.

On a more financial note, Apple's latest earnings per share (EPS) stands at $6.13, giving it a price-to-earnings (PE) ratio of 29.66. This metric lends confidence to Apple's profitability profile, although it's slightly on the higher side, signaling comparatively higher price investors are willing to pay.

The company has 15.55 billion shares outstanding, with substantial daily trading volumes, indicating substantial investor interest. The latest activity saw around 24 percent more trades than the average volume, signifying growing investor interest in the stock. Apple's Discounted Cash Flow (DCF), which sits at $183.72, overstates the last closing price, hinting that the stock could potentially be undervalued.

Analyst ratings, healthy financials, and market position cause many to perceive Apple as a potentially profitable investment. Of those consulted, 23 recommend it as a "buy," while nine recommend a "hold" approach, suggesting further growth potential exists.

However, it's worth noting the wide divergence between the high and low target prices set for Apple stock. Analysts have set a target low at $110 and a high at $240, with a consensus target price at $190.69. This vast disagreement could indicate uncertainty surrounding Apple's future performance.

Technical Analysis

Apple On the technical front, Apple's relative strength index (RSI14) stands at 61, signaling near-overbought conditions. Combining this with the Moving Average Convergence Divergence (MACD) figure, which is slightly negative, a possibility for temporary price correction might exist.

The stock's 50-day moving average (MA) is $176.60, while its 200-day MA is $171.71, suggesting an overall bullish trend, as the prices are performing better than both short-term and long-term averages. However, the aforementioned MACD and RSI figures may indicate a potential pullback.

The stock holds support at $179.8, just below the last closing price, and resistance at $182.91, near the last high. ATR (average true range), used to measure market volatility, is 1.85, suggesting a somewhat stable trading range.

Outlook and Final Evaluation

With the next trading day being November 08, 2023, and considering the stock's recent bullish run and analysts' opinions, the stock price might fluctuate near current levels in the short term, approaching the support level if a correction occurs.

However, over the upcoming week, considering the overall bullish trend, positive ratings, and strong fundamentals, the price might attempt to cross the resistance and approach the DCF valuation.

The reported delay in Apple's software overhauls taken into account, short-term fluctuations are to be expected. Nevertheless, Apple's long-term growth potential seems promising based on analyst's expectations of its innovative capacity and strong market positioning.

Therefore, given the current data, Apple Inc.’s stock is evaluated as "Hold" in the short-term due to possible correction but a "Buy" for long-term investors considering its robust fundamentals and growth potential. This suggestion accurately balances the technical and fundamental perspectives while looking into the market dynamics and industry trends.

Check full Apple forecast and analysis here.