Reports Q3 2021 results on Tuesday, July 27 after market close
Expected Revenue: $73.26 Billion
EPS forecast: $1.01
When Apple (NASDAQ:) announces its latest earnings later today, investors are confident that the iPhone maker will once again exceed expectations and produce a new one.
In anticipation, the stock has hit new highs after a slow start to 2021. Shares closed at $148.99 yesterday, after a 15% jump so far. Since the March 2020 dip, Apple stocks have yielded investors more than 150% returns.
What's keeping that rally alive are signs that demand for the California-based tech giant's flagship smartphones remains strong. Bloomberg reported earlier this month that Apple had asked suppliers to build as many as 90 million next-generation iPhones this year, a sharp increase from the number of smartphones in 2020
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The company has maintained a constant level of approximately 75 million units for the first run for the launch of a new device until the end of the year in recent years. The improved forecast for 2021 would suggest that anticipating the first iPhone launch since the rollout of COVID-19 vaccines will drive additional demand, according to the report. The next generation of iPhones will be Apple's second generation with 5G capabilities, a major incentive for users to upgrade.
If that happens, it will further strengthen the bullish case for Apple stocks, which is based on the expectation that the company will enter a new "super cycle" for its new iPhone models, with millions of existing users upgrading outdated smartphones. The latest iPhone has the ability to access the next-generation 5G cellular network, which promises faster internet speeds.
Apple's Innovation Machine
To boost Apple's revenue To keep growing, it is critical to maintain its innovation in machine active, introducing new gadgets and upgrades to its existing products. Indeed, the latest information from the company, as well as media sources, suggests the company has many exciting upgrades in the works.
Apple plans to launch new MacBook Pro laptops with modified Apple chips, Apple Watches with an updated display, a redesigned iPad mini and an entry-level iPad.
Despite this optimism, some in the analyst community remain conservative in their consensus estimates for the release of the company's third-quarter fiscal results later in the day. The Street claims revenue of $73.26 billion and earnings per share of $1.01.
Morgan Stanley analyst Katy Huberty in a recent note raised her price target for Apple ahead of the company's fiscal third-quarter report, saying the recent jump for stock hasn't fully priced into a strong iPhone launch. later in the year.
Huberty said:
"While post-profit stock performance may have been more muted given Apple's recent outperformance, we are buyers heading for the iPhone 13 launch in September."
Her new price target for Apple stock is $166 per share, an increase of 11% from current levels.
Bottom Line
Apple's revenues can continue to benefit from strong demand for its new iPhone models and other upgrades the company plans to make for its popular products. Apple stock could rise if the company beats expectations, especially if consensus estimates remain quite conservative.
