Sign InApple Inc. Stock Analysis: Bullish Trend Expected with Potential Near-Term Volatility
Summary
As of July 17, 2023, Apple Inc.'s stock (AAPL) closed at $193.99, experiencing a 1.73% increase, and based on technical and fundamental analysis, the stock is categorized as a Hold with a predicted trading range of $195-198 in the near term.
Basic Company and Stock Data
As of July 17, 2023, the closing price for Apple Inc. (Ticker: AAPL) on the NASDAQ was $193.99, marking a rise of $3.30 (1.73%) on this date. The day's price range was between $191.81 and $194.32. The share has seen its high in the year at $194.48 and a low at $124.17. The firm currently boasts a market capitalization of approximately $3.05 trillion. A volume of 49.80 million shares was exchanged on this day, comparing slightly lower to the average volume of 56.68 million shares.
Technical Analysis
On the technical side, the 14-day Relative Strength Index (RSI) stands at 70, indicating that the stock currently trades in the overbought territory. The 50-day moving average ($180.87) and the 200-day moving average ($156.26) underline an overall bullish trend as the stock trades above these indicators. The 3-month Moving Average Convergence Divergence (MACD) of 3.79 also suggests a bullish trend.
Fundamental Analysis
Based on fundamental indicators, AAPL trades at a Price to Earnings ratio (P/E) of 32.94, making it a relatively expensive stock, given the company's earnings per share (EPS) of $5.89. There are approximately 15.73 billion shares outstanding. The discounted cash flow (DCF) value of $195.44 demonstrates that the stock is slightly undervalued, considering its last closing price.
Future Prospects
The consensus target is $184.12, median target being at $185, while the high and low targets are $250 and $110, respectively.
Recent News
A number of recent news articles continue to shape investor sentiment towards AAPL:
- Given the current economic uncertainty, Apple has grown to a $3 trillion market cap, outperforming many other companies and sectors.
- The company is reportedly focusing on the India market, seen by some as a $40 billion opportunity ahead.
- There are rumors of Apple introducing its Tap to Pay feature on iPhone to the Brazilian market.
- NASDAQ will implement a special rebalancing for the NASDAQ 100 index on July 21, 2023, which might affect Apple's performance.
Final Evaluation and Predictions
Based on technical indicators, the stock appears set for a bullish trend, while being overbought. The fundamentals appear a bit frothy with a high P/E ratio, though the stock being slightly undervalued by DCF metric may present an opportunity.
The news of Apple's forays into the India market and rumors of expanding its Tap to Pay feature to Brazil suggest robust longer-term prospects. However, the near-term trading may be affected by the proposed NASDAQ rebalancing.
Given these factors, there's a possibility that the stock could trade around $195-198 on the next trading day, July 18, 2023, and possibly hover around this range in the upcoming week.
Final Recommendation
Considering both the technical and fundamental analysis, and taking into account the recent news and future prospects, Apple Inc.’s stock is categorised as a "Hold". The combination of a somewhat overheated stock based on RSI, expensive valuation (P/E ratio), but attractive DCF value, robust longer-term prospects and potential short-term volatility due to NASDAQ rebalancing pose a balanced risk-reward scene. Long-term investors may see the current price as a reasonable entry point, while short-term traders may want to monitor for potential price volatility.
