The largest company on Wall Street, Apple inc., will present its quarterly report today after the closing bell. Apple, with a market capitalization of $2.5 trillion, has beaten Wall Street expectations ever since taking over from Microsoft as the most valuable company.
Although Apple did not give any projections for the 2nd quarter of fiscal 2022 due to uncertainty about the post-Covid-19 impact, investors still see Apple as a strong company and expect Apple to continue to report strong business growth this quarter. Apple has consistently reported financial reports that outperformed market projections for the year ending 2021. While Although Apple struggled somewhat in smartphone sales, good improvements in the service business sector covering the APP Store, Apple Music, iCloud and others helped boost Apple’s business. Apple’s portfolio in non-phone sectors such as Mac and iPad is also expected to increase in this 2nd quarter report. The market is now projecting Apple to report revenue of $94.0 billion, an increase of more than 5% ($77.1 billion) over the same quarter last year. Meanwhile, earnings per share (EPS) for the 2nd quarter is projected at $1.42 per share, an increase of more than 2% from the $1.40 reported in the same quarter last year. There is some concern that China’s lockdown orders will hit the Apple supply chain, where nearly half of Apple’s device suppliers are based. It is not expected to affect the financial reporting for this quarter; instead it is likely to have an impact in the next quarter. Apple’s latest product launch, the self-service phone repair shop, is expected to continue to help Apple maintain business growth and remain a giant on Wall Street.
Apple shares (MT5: #Apple) for 2022 are on somewhat of a roller coaster following geo-political factors and high inflation. Apple shares hit a high of $182.87 in early January before falling to $150 following the Russia-Ukraine geo-political crisis. It bounced back to $180 at the end of March and retreated in April and is now trading at $156.50 on April 27. Apple shares are now trading below the 50- and 200-day MA with the RSI-14 moving closer to oversold levels, while the MACD signal line has also broken below 0. Market analysts suggest Apple shares are still in the Buy category. Apple’s stock outlook for the next 12 months is forecast at a median of $191.00, + 24% compared to current prices.
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Tunku Ishak Al-Irsyad
Market Analyst – HF Education Office Malaysia
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