Wall Street analysts are generally positive on Apple ahead of the company's March-quarter earnings report, despite supply-chain concerns and macroeconomic uncertainty. Apple stock has been holding strong recently amid heightened market volatility.
For the past two weeks, Apple stock has been trading along its 50-day moving average line. Its relative strength line has risen slightly this week as it outperforms the S&P 500 index.
The Cupertino, Calif.-based company plans to release its fiscal second-quarter results late Thursday. Analysts expect the company to use the occasion to increase its quarterly cash dividend and share buyback plans.
On Friday, Deutsche Bank analyst Sidney Ho said Apple stock is a relatively safe haven, despite pockets of risk. He reiterated his buy rating on Apple stock with a price target of 210.
Apple Stock Drops Friday
On the stock market today, Apple stock fell 2.8% to 161.79 amid a broad market sell-off.
"With business fundamentals expected to remain strong despite macro uncertainty and continued strong growth in its high-margin services business, we believe AAPL stock is a good hiding place in this volatile market and that its premium valuation is justified," Ho said in a note to clients.
Investor concerns ahead of Apple's earnings report include manufacturing shutdowns in China related to the Covid-19 pandemic. Weakening demand for smartphones in China is another worry, Ho said.
Significant Catalysts Seen
In a note to clients Friday, BofA Securities analyst Wamsi Mohan kept his buy rating on Apple stock with a price target at 215.
Mohan expects Apple to announce a stock buyback authorization of at least $70 billion. Plus, Apple is likely to increase its dividend 5%, he said.
"Heading into the quarter, we see some near-term risk from Covid-related shutdowns in China, lower App Store sales and FX (foreign exchange)," Mohan said. "However, we continue to view Apple as a long-term winner and believe shares have more room to rerate higher as we see significant catalysts including the opportunity to better monetize its installed base, advertising-related revenue growth, opportunity in augmented/virtual reality and long-term growth in services."
Analysts polled by FactSet expect Apple to earn $1.43 a share on sales of $94.1 billion in the March quarter. That would translate to year-over-year growth of 2% in earnings and 5% in revenue.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
