Apple Stock Climbs Wall Of Worry Ahead Of Earnings Report

Consumer electronics giant Apple (AAPL) faces numerous concerns ahead of its December-quarter earnings release next week. But Apple stock has been rising ahead of the report.

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The Cupertino, Calif.-based company plans to post its fiscal first-quarter results late Thursday. Analysts polled by FactSet expect Apple to earn $1.94 a share on sales of $121.8 billion in the December quarter. That would translate to year-over-year declines of 8% in earnings and 2% in sales.

A difficult macroeconomic climate is pressuring sales of iPhones and other Apple devices. Plus, Apple suffered supply constraints from Covid-related production slowdowns at its main iPhone factory in China last quarter.

“Concerns are high from investors as consumer spending pulls back across various product segments, including smartphones,” Daniel Morgan, senior portfolio manager with Synovus Trust, said in a note to clients Friday. Weaker consumer spending is likely to drive Apple sales and earnings estimates lower for rest of the fiscal year, he said.

Apple Stock On The Rise

On the stock market today, Apple stock advanced 1.4% to close at 145.93.

Wall Street is bracing for cautious commentary from Apple executives about the March quarter, UBS analyst David Vogt said in his note to clients. Vogt rates Apple stock as buy with a 12-month price target of 180.

“While we don’t expect the resumption of detailed guidance typical of Apple earnings prior to Covid, we expect the commentary to be cautious regarding product demand across the board,” Vogt said. Also, services growth likely will be lackluster, he said.

For the March quarter, analysts are predicting Apple earnings of $1.49 a share, down 2%, on sales of $97.5 billion, up a fraction.

Apple stock has a middling IBD Composite Rating of 59 out of 99, according to IBD Stock Checkup.

IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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