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Since reporting a disappointing earnings report for its fiscal third quarter on August 3, shares of Apple (AAPL) have fallen more than -7% and posted a 2-1/2 month low Wednesday. With Apple expected to release the new iPhone 15 around the middle of next month, some analysts speculate that now may be the time to buy the stock.
Citigroup expects shares of Apple to rise in the lead-up to the new iPhone debut and said in the past seven years, Apple had gained an average of 8% in the period between its fiscal third-quarter earnings and the debut of a new iPhone model. Deepwater Asset Management believes the new iPhone model will be enough to stir up investor excitement and boost the stock, saying,” Big picture, we think people are going to be excited about some of the tweaks to the phone.”
According to Bloomberg data, most analysts are upbeat on the future prospects for Apple, with the average price target of about $203 a share, implying almost 15% upside for the stock. However, even though millions of existing Apple customers may be due for an upgrade, some major economies are showing signs of slowing. The most recent economic data from China, a key iPhone market, showed weaker-than-expected consumer spending, a possible headwind for new iPhone sales.
Some analysts are optimistic that the latest features on the iPhone 15 can spur users to buy the new model. The higher-end Pro model is expected to include a thinner border, a titanium frame, a better camera, and a faster processor. Mahoney Asset Management believes a well-received iPhone release could boost Apple’s sales in upcoming quarters, noting the significant number of Apple customers currently using older models.
However, some analysts are wary about the high expectations for Apple’s new iPhone model. KeyBanc Capital Markets said this week that consensus may be too optimistic about prospects for next quarter. Also, DA Davidson is skeptical that the release of the new iPhone will send Apple’s shares flying, saying the -2.4% decline in iPhone revenue in the most recent quarter “puts more pressure on the iPhone 15 launch, but we think investors have to table their expectations.”
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
