* Reports Q4 2019 results on Wednesday, October 30 after closure
* Revenue expectation: $ 62.94 billion
* EPS expectation: $ 2.83
Apple Inc. (NASDAQ 🙂 is one of a very limited number of technology companies that have proven predictors to be wrong this year. Supported by improving sales prospects, inventory has so far increased by around 50% and has surpassed other big names such as Google (NASDAQ 🙂 and Amazon (NASDAQ :).
But that strong rally, which began in August, will today undergo its first major test when the maker of popular iPhones releases its fiscal 2019, fourth quarter.
The consensus revenue forecast shows that the majority of analysts have quickly changed their opinion about Apple, which had been looking grim for some time, hurt by the adult iPhone activities because users held on to their older versions and were expensive models could not get much grip. iPhones make up approximately 50% of the total turnover of the company.
Game-Changer iPhone 11
But a pessimistic case against Apple – in which the company is losing its market share too quickly – does not look credible after the successful launch of the iPhone 11 last month. Wall Street consensus estimates for iPhone shipments in Apple's current fiscal year have increased by 3 million units as analysts in the strong reception the new models have received since they went on sale on September 20, according to FactSet.
In addition to the iPhone, there are other positive developments that have also helped to remove some of the uncertainty that Apple shares seized early this year. For example, the US and China have made significant progress in resolving their trade dispute and the two countries are likely to sign the first phase of their pact next month. Apple has a huge interest in China, where it maintains an extensive network of suppliers. The company also sells a large number of mobile phones to consumers in China, the most populous nation in the world.
The other catalyst optimism is the success of CEO Tim Cook in generating a significant share of revenue from products other than iPhones. Turnover in Apple's Wearables, Home and Accessories segment grew by 48% to more than $ 5.5 billion in the second quarter, showing that these products are quickly catching up with the slowing demand from iPhones.
A new driver that will drive demand for new hardware is the rollout of Apple & # 39; s fifth generation, or 5G, phones in 2020. Wall Street estimates for the impact of 5G iPhones on Apple are too conservative , according to Jefferies analyst Kyle McNealy.
Activated by this cheerful context, Apple shares reached a record high of $ 249.05 on Monday. Trading at $ 243.29 at the end of Tuesday, the stock has rebounded more than 70% from the January low, bringing the company's valuation back to more than a trillion dollars.
Bottom Line
Apple's current rise is consistent with our optimistic view of these stocks and is supported by real improvements in fundamentals. In addition, Apple's huge share buy-back plan and growing dividends, which now yield 1.25%, make this share even more attractive for long-term investors. Today's earnings report could really solidify this rally.
