Sign InApple Inc. Shows Potential Upside Despite Sales Decline and High Valuations
Summary
As of August 03, 2023, Apple Inc. (AAPL) closed at $191.17, with a decrease of 0.73%, but despite a recent decline in sales, the stock still has potential upside due to bullish technical indicators and successful earnings performance, although analysts have mixed views, suggesting a Hold recommendation.
Fundamental Analysis
Apple Inc. (ticker: AAPL) closed at $191.17 on August 03, 2023, marking a decrease of -1.41 (-0.73%). This trading day saw a low and high of $190.84 and $192.37, respectively, putting the stock near its year-high of $198.23. Apple's year low stands significantly lower at $124.17.
With a whopping market capitalization of $3.01 trillion, Apple's considerable size and influence cannot be ignored. The company operates with a P/E ratio of 32.46, which is notably higher than the average for companies in the tech sector, suggesting investors are willing to pay a premium to own shares. The EPS on record is $5.89, hinting at a profitable company.
The company's trading volume on the last close was 57.51 million, slightly above the average volume of 56.25 million. The company's total shares outstanding stand at 15.73 billion.
The company's recent earnings announcement showed a slowdown in sales, constituting a third straight quarterly drop. This suggests that Apple is currently navigating through a tough business period.
Technical Analysis
Apple's RSI14 is 51, which indicates a balanced market condition, neither overbought nor oversold. The MACD (3-month) is 1.91, suggesting a positive short-term momentum.
The company's stock stands above both its 50-day moving average (186.54) and 200-day moving average (159.55). This is typically a bullish signal, indicating that the stock has been on an upward trend for some time.
Analyst Targets and News
The high analyst target for AAPL stands at $250 and the low target is set at $110. The consensus among analysts is placed at $184.85, indicating possible downside, whereas the median target points to a minor decline to $185.
The newsflow around Apple has been a mix of bearish and bullish indications. One advisory firm stated that it struggled to justify Apple's current valuations. At the same time, there is speculation Apple might be shifting towards a subscription-based business model, which might hold growth potential.
Forecast and Recommendation
Considering both fundamental and technical signs, and despite a recent decline in sales, Apple appears to still hold potential upside. The bullish technical indicators and successful earning performance lead to a moderately positive short-term outlook for the stock. However, investors must take into account analyst targets and news signaling a potentially overvalued stock.
For the next trading day, August 04, 2023, the stock is likely to retain its current upward trajectory, supported by its positive MACD and position above its moving averages. On the other hand, for the upcoming week, the price might see modest fluctuations in line with its recent behavior and the current market sentiments.
In conclusion, the analysis suggests a "Hold" recommendation for AAPL. Presently, while Apple still holds promise considering its market position, potential move to a subscription base, and positive technical indicators, the slowing sales and high valuations are glaring risks. Investors are advised to keep a close watch on this stock and analyze any forthcoming data before making future investment decisions.
